The African Development Bank (AfDB) and Banque Centrale Populaire (BP) have entered a USD 70 million risk-sharing agreement to boost trade and support SMEs across Africa.
In a significant move to bolster trade and economic activities across Africa, the African Development Bank (AfDB) and Banque Centrale Populaire (BP) have signed a landmark USD 70 million risk-sharing agreement (RSA). This strategic partnership is set to invigorate private sector financing and enhance trade capabilities across the continent, focusing on empowering small and medium-sized enterprises (SMEs).
Enhancing financial inclusion for SMEs
One of the primary objectives of the AfDB and BP collaboration is to improve financial inclusion for economic operators, particularly SMEs. By consolidating the foreign trade capacities of these enterprises, the initiative is projected to catalyze approximately €200 million in trade. This enhancement is vital for SMEs, which often face significant barriers in accessing financing and participating in international trade.
Strengthening Morocco’s production and competitiveness
Achraf Tarsim, AfDB’s Country Manager for Morocco, highlighted that the partnership, “includes objectives to diversify Morocco’s production capacity, strengthen its competitiveness, generate additional tax revenues, while creating new job opportunities.”
Supporting local African banks
The RSA allocates an overall risk limit to local African banks, bolstering their capacity to support economic activities on the continent. This is particularly crucial as local banks face declining financing and confirmation lines from foreign correspondents. By fortifying relationships with these banks, BP aims to provide the necessary financial backing to sustain and grow African trade.
A model of South-South collaboration
Kamal Mokdad, CEO of BP and the group’s international operations, emphasized the partnership as an ideal model of South-South collaboration. He stated, “This new agreement with the African Development Bank represents a comprehensive solution adapted to the development needs of pan-African trade and Africa’s trade with the rest of the world.” This sentiment reflects the broader vision of integrating local banks into the international financial system and promoting sustainable economic growth across Africa.
Driving economic resilience and prosperity
The partnership between AfDB and BP is not just a financial arrangement but a strategic alliance aimed at driving economic resilience and prosperity across Africa. Mohamed El Azizi, AfDB’s Director General for North Africa, remarked at the signing ceremony, “Hand in hand, we are offering solutions to unleash the potential of companies that believe in their continent, invest in it, and create added value and jobs.” This collaboration is expected to provide crucial support for commercial transactions and enhance trade capabilities, contributing significantly to the continent’s economic development.
A promising future
The $70 million risk-sharing agreement between AfDB and BP marks a pivotal step in boosting African trade and supporting the continent’s economic growth. By focusing on SMEs, enhancing financial inclusion, and promoting South-South collaboration, this partnership is poised to make a lasting impact on Africa’s trade landscape, fostering resilience and prosperity for years to come.
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