Angola’s non-oil sectors to benefit from US$100mn facility
The African Development Bank (AfBD) has approved a US$100mn trade finance credit line to Angola’s Investment Bank (Banco Angolano de Investimentos, BAI).
The funding will enable BAI to provide foreign currency liquidity support to finance export and import transactions of SMEs and corporates operating in what the AfBD identifies as “transformative sectors” in the country. This includes supporting efforts to diversify the economy away from oil through the Angola Invest program, a programme under which the Angolan government provides credit default risk cover to financial institutions to fund SMEs in the non-oil sectors.
The hope is that the credit line will spur investment in agriculture, fisheries, livestock, manufacturing and extractive industries, by facilitating the import of raw materials, intermediate goods and capital goods.
It is also expected to benefit BAI’s subsidiaries in Cabo Verde and São Tomé and Príncipe, as the bank will be able to provide guarantees on their international trade transactions.
The facility comes at a time when it is much needed: the Angolan economy is ailing, severely hit by low commodity prices. At the same time, Angola’s banks are finding it difficult to secure foreign currency to finance the import of critical essential products and capital goods, and to drive the diversity agenda.
In a statement, the AfDB says the US$100mn is expected to support at least 500 SMEs and local firms in the non-oil sectors, with a value expected to reach US$700nn over the next three and a half years.
“The intervention will enhance BAI’s capacity to originate trade finance transactions in the country and effect timely settlement of trade finance obligations to various counter parties. This is crucial to restore confidence in international counter parties supplying essential goods, agricultural inputs and capital goods/equipment to Angolan corporates and SMEs on favourable trade terms,” AfDB says.take me back