The African Export-Import Bank (Afreximbank) and Ecobank have signed a US$500mn memorandum of understanding to finance private sector projects and trade finance transactions in Africa.

Under the agreement, which is aimed at promoting intra-African trade, the banks have committed to “design joint innovative tailor-made financial instruments and solutions to support private sector corporates, select strategic public sector institutions, as well as SMEs”, according to a statement by Afreximbank.

The initiative includes the creation of a US$500mn programme to finance trade amongst Afreximbank member countries where Ecobank is present.

Ecobank Group CEO Ade Ayeyemi calls the partnership between Ecobank and Afreximbank a “win-win collaboration”.

“It is co-operation that will lead to a more efficient way of channelling trade finance towards supporting growth of intra-African trade and industrialisation,” he says.

Afreximbank president Benedict Oramah says the collaboration opens up more opportunities for African businesses to access much-needed financing for their trading activities.

“Inadequate access to trade finance remains one of the greatest obstacles to Africa’s economic development,” he says. “We are very proud at the opportunity to work with a pan-African financial institution like Ecobank to deliver on our shared goal of enhancing access to trade finance in Africa.”

Afreximbank currently has 41 member countries across the African continent, while Ecobank is present in 36.