A risk-sharing arrangement worth $70 million has been granted by the African Development Bank (AFDB) for the Banque Centrale Populaire (BCP) of Morocco in order to stimulate foreign trade.
According to the article, the agreement intends to increase the capability of African banks and their SME clients by promoting trust among the participants in the African financial system and accelerating the expansion of regional and global trade.
Additionally, it stated that it aimed to assist SMEs in numerous African nations in gaining access to trade finance instruments.
The accord is anticipated to immediately help African issuing banks, whose ability to finance trade is constrained by the insufficient confirmation lines provided by foreign banks, it was highlighted.
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The Risk Participation Agreement, a risk-sharing agreement between the AfDB and a commercial bank, divides the default risk on a portfolio of trade finance transactions.
With the AfDB often sharing up to 50% of the risk, the arrangement provides regional and international commercial banks with partial coverage for their trade finance activities in Africa.
Read also: African Development Bank (AfDB) partners with Africa Fintech Network on $525,000 grant
The BCP
Through its network of banks known as “Banque Atlantique,” BCP, a Moroccan regional banking firm, currently conducts business in 18 African nations. The group has branches in sub-Saharan Africa through its subsidiary Banque Atlantique.
AFDB approves €14m for Tech Hub in Cabo Verde
In another development, a deal for €14 million (about $15,451,100) has been reached between the Cabo Verdean government and the African Development Bank to improve the country’s Technology Park by making it more climatically robust and business-friendly.
The contract was signed in Praia, Cabo Verde on July 19 and announced by AFDB last week.
The country is already becoming a cutting-edge regional information and communication powerhouse thanks to a loan of €31.59 million from the African Development Bank, which helped finance the park’s initial construction. ICT experts from all over Africa will visit the park, which serves as a special economic zone with tax and import tariff incentives. There are two campuses for it: one in Praia, the nation’s capital, and the other on the island of So Vicente.
The hub will be furnished with two data centres as part of a public-private partnership and configured to function on renewable energy as part of phase two.
A €1 million seed fund will be established by the Cabo Verde ICT hub to support around 20 cutting-edge local firms. More than 50 tech businesses from all around Africa will be given integration grants of at least €5,000 each. Along with providing 300 young Africans with soft skill training over the next three years, it is also planned to work with foreign colleges and businesses to help them get ready for the jobs that will be generated as a result of the Fourth Industrial Revolution(link is external).
Olavo Avelino Garcia Correia, the Deputy Prime Minister and Minister of Finance of Cabo Verde, signed the loan contract. He emphasised his excitement about the project’s potential for transformation. In his words, “Our ambition is to transform Cabo Verde into a digital nation, with a circulating economy and the technology parks in Praia being part of this significant government strategy.”
Uyoyo Edosio, the project manager for the African Development Bank, emphasised the project’s synergies throughout the ceremony. She claimed that as tourism and technology merge, Cabo Verde’s distinct tourism edge will be strengthened.
The African Development Bank’s Director for Industrial & Trade Development, Dr. Abdu Mukhtar, made the following statement about the loan signing: “The next generation of African talents need not seek opportunities abroad; Cabo Verde possesses the necessary infrastructure and a supportive political system to cultivate their dreams and ambitions within their homeland.”
AFDB approves $16m for Youth Entrepreneurship Bank in Liberia
Meanwhile, AFDB has also approved $16 million for the creation of a Youth Entrepreneurship Investment Bank (YEIB) in Liberia.
Benedict Kanu, the Liberia country manager for the AfDB Group, said the initiative is intended to support youth-run micro, small, and medium-sized businesses in Liberia’s expanding agribusiness and related industries.
“Over 30,000 youth-led businesses are expected to receive support from the YEIB over the next 17 years, “The YEIB will serve as the initial impetus for creating Liberia’s currently nonexistent financial environment for young entrepreneurship.
“It can establish the framework for future, potentially more lucrative investments by generating 120,000 direct and indirect jobs and releasing about $500 million in further funding.
“The YEIB is a long-term investment with a significant impact on job creation and financial inclusion,” he declared.
Over 60% of Liberia’s population is under the age of 30, and Kanu claims that because of the country’s high unemployment rate, many young people are not given the opportunity they deserve.
“With about 45% of its youths not participating in employment, education, or training, Liberia is confronting significant issues with youth employment.
With important consequences for societal fragility, resilience, and cohesion, Kanu continued.
These funds approved for Morocco, Cabo Verde and Liberia are some of the financing deals the AFDB made in July to support different sectors across African nations. Receiving countries are expected to judiciously maximise these funds to ensure that the dream of having a technologically advanced Africa is steadily being achieved.