Ecobank will borrow US$200mn from the African Development Bank (AfDB) for trade facilitation, following an agreement signed in Kigali last week.
The 3.5-year facility comprises two components: a US$100mn unfunded risk-sharing facility to boost its capacity as an international confirming bank for trade transactions originated by issuing banks in Africa, and another US$100mn trade facilitation loan which will be used to provide trade finance support to local corporates and SMEs in Africa. It is expected that the facility will support approximately US$1.8bn over its lifetime.
“This facility will greatly support international and intra-regional trade in Africa,” says Ecobank group CEO Albert Essien.
Meanwhile, in the last week, Ecobank has also signed a memorandum of understanding (MOU) with eleni LLC, a company that builds commodity exchanges for frontier markets in Africa. The MOU establishes a framework for the two institutions to “promote and accelerate the development of Africa’s agriculture”, says a statement issued by the bank.
“The partnership between Ecobank and eleni aims to realise a shared vision of transforming Africa’s competitiveness in global commodity markets, enhancing value addition and processing in the domestic economy and enhancing food security,” the statement continues.
Ecobank recently announced that it was a keystone investor in the establishment of the Ghana Commodity Exchange, eleni’s first major foray in West Africa.
“As well as increasing market transparency and reducing transaction costs, commodity exchanges play a crucial role in the monitoring and assessment of risk,” says Ecobank’s Essien. “Instruments such as warehouse receipts reduce uncertainty and improve access to finance across the value chain. We look forward to collaborating further with eleni to enhance Africa’s agricultural financing capabilities.”