Citi and British International Investment (BII) have launched a US$100mn risk-sharing facility to strengthen liquidity among African lenders and support imports of agricultural commodities and other economically important goods to the continent. 

The agreement targets businesses “with high potential but limited by a lack of finance”, focusing on underserved markets including Benin, Cameroon, Côte d’Ivoire, Rwanda, Tanzania, Uganda and Zambia. 

The facility extends liquidity across Citi’s network of commercial banks, enabling more than 200 local lenders to finance imports of commodities such as wheat, fertiliser, rice and sugar, as well as essential equipment and machinery, BII and Citi say in a joint announcement. 

“Our investment with Citi deepens BII’s footprint across the continent and supports local businesses struggling to maintain and expand operations due to a lack of capital,” says Nick O’Donohoe, chief executive of BII, the UK’s development finance institution (DFI). 

“The facility is testament to our commitment to tackle complex issues such as food security in Africa by extending liquidity solutions to strategic sectors.” 

Stephanie von Friedeburg, head of DFI strategic partnerships at Citi, adds that the partnership will “strengthen trade, and food security in frontier and emerging African economies”. 

The agreement builds on previous collaborations between BII and Citi. In May 2022, the duo unveiled a risk-sharing facility with BII acting as a guarantor for supply chain finance (SCF) facilities provided to SME suppliers. 

Citi said at the time it would be able to increase annual SCF volumes in the continent by up to US$400mn as a result. 

The deal comes as Africa’s trade finance gap – the estimated unmet demand for facilities across the continent – continues to widen. 

BII and Citi say that figure climbed from US$81bn in 2019 to US$120bn last year, driven in part by rising commodity prices and hikes in interest rates, as well as a “critical lack of foreign currency in the region”.