Access Bank PLC, Nigeria's largest commercial bank by assets, has partnered with British International Investment (BII), the UK's Development Finance Institution, to extend a $60 million trade finance facility across Nigeria and five of its pan-African subsidiaries. The agreement, signed on Tuesday, is expected to stimulate African trade volumes by $90 million, aiding local businesses in enhancing their import and export capabilities.
The move comes amid a challenging macroeconomic environment, characterized by higher inflation and a rising cost of capital that has exerted downward pressure on currency performance both domestically and in the target markets of Democratic Republic of the Congo, Mozambique, Rwanda, Sierra Leone, and Zambia. BII's intervention is aimed at providing systemic liquidity and extending countercyclical support to build economic resilience.
The World Trade Organization estimates that between 80% and 90% of world trade relies on the availability of trade credit. The financing gap in Africa stood at $82 billion prior to the COVID-19 pandemic and has been increasing since. Access Bank aims to fill this gap by providing 15% of trade finance across Africa through the growth of its subsidiaries' trade books.
Currency instability in Nigeria has hindered the wider proliferation of dollar-denominated trade loans across African markets. By specifically targeting import-dependent economies, the new partnership will improve the availability of USD-denominated trade loans, ensuring key commodities and manufacturing inputs for production and export of goods are available. This is expected to improve livelihoods and preserve jobs for employees of importers and exporters with limited access to foreign exchange trade loans.
The loan facility will be channeled into companies in construction, manufacturing, and Fast-Moving Consumer Goods (FMCG), directly contributing to UN Sustainable Development Goals 8 (Decent work and economic growth) and 9 (Industry, innovation, and infrastructure).
Simultaneously, the facility will improve inclusion by qualifying under the 2X Challenge, aimed at strengthening female participation and leadership in business. Access Bank will ensure the allocation of loans is designed to advance its gender commitments. Additionally, the facility will contribute to BII's BOLD program, dedicated to enhancing the availability of finance at more affordable rates to Black, African-owned businesses.
Seyi Kumapayi, Executive Director, African Subsidiaries at Access Bank, said that the strategic collaboration strengthens their import and export capabilities and expands resources to support local industries, especially women-owned businesses.
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