From John Silas, Lagos
Driven by the mission to scale intra-African trade and position the continent as a viable market for global trade, Access Bank has entered into a partnership with British International Investment (BII), the UK’s Development Finance Institution (DFI) and impact investor with the objective to narrow trade finance gap across Africa.
Announcing the partnership during the week, the UK DFI said it has approved $60 million trade finance facility for Nigeria’s largest deposit money bank and five of its pan-African subsidiaries, which facility is expected to strengthen import and export capabilities amongst local businesses and plug the foreign currency supply gap.
Global trade largely relies on dollar-denominated trade credit, and Africa is estimated to have over $82 billion trade finance deficit. Against this background, the pan-African lender is aiming to provide 15 percent of trade finance across Africa, by growing the trade books of its subsidiaries.
The loan facility supports Access Bank’s strategy not only to enable continental trade but also deepen BII’s commitment to bolstering financing environments in fragile economies. BII estimates the loan programme will stimulate African trade volumes by US$90 million.
An emailed release by the Lagos-based leading retail bank stated that the agreement reinforces ongoing relationship with BII and facilitates the provision of systemic liquidity needed to address challenging macroeconomic headwinds of higher inflation and rising cost of capital which have pressured the local currency stability, and other target markets of the Democratic Republic of Congo, Mozambique, Rwanda, Sierra Leone, and Zambia.
“Intervention at this critical juncture underlines the key role of BII, and development finance institutions in general, in extending countercyclical support to build economic resilience,” the statement reads in part.
“The programme aligns with Access Bank’s strategy to enable continental trade and deepens BII’s commitment to bolstering financing environments in fragile economies. BII estimates the loan programme will stimulate African trade volumes by US$90 million,” the statement added.
According to the lender, by specifically targeting import-dependent economies – many of which will mark the first engagement with BII’s Trade programme – the improved availability of US dollar-denominated trade loans will ensure the availability of key commodities and manufacturing inputs for the production and export of goods. The key outcome will be improving livelihoods and preserving jobs for the employees of importers and exporters with limited access to foreign exchange trade loans.
With the loans channelled into companies in construction, manufacturing and FMCG, the programme will directly contribute to the UN Sustainable Development Goals 8 (Decent work and economic growth) and 9 (Industry, innovation and infrastructure).
Simultaneously, the facility will improve inclusion. Qualifying under the 2X Challenge, aimed at strengthening female participation and leadership in business, Access Bank will ensure the allocation of loans is designed deliberately to advance its gender commitments. In addition, the facility will contribute to BII’s BOLD programme, 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, remarked: “Access Bank is on a purposeful mission to scale intra-African trade and position the continent as a viable market for global trade. Hence, we are thrilled about the tremendous potential that this trade finance facility with the BII affords us across our pan-African subsidiaries. This strategic collaboration not only strengthens our import and export capabilities but also expands our resources to support local industries – especially women-owned businesses – and ultimately drives economic growth. By stimulating trade volumes, we will be playing a key role in fostering long-term economic resilience for the continent, while increasing its attractiveness for increased foreign investments.”
Admir Imami, Director and Head of Trade and Supply Chain Finance at BII, noted: “Access Bank is a long-standing partner of BII’s and our new partnership is a significant step closer to narrowing the trade finance gap in Africa, particularly in countries such as the DRC and Rwanda.
Access to finance in fragile states is hugely constrained. Often these countries are buffeted by macroeconomic events far beyond their control. BII and Access Bank share a conviction that building the resilience of these businesses by ensuring affordable access to foreign exchange is vital to keep intra-African trade moving and support the growth of inclusive economies.”
Benson Adenuga, Head of Office & Coverage Director for Nigeria, BII said: “Our latest commitment to Access Bank reiterates our assurance to this leading multinational institution and to Nigeria. It comes at a time when Nigeria’s fragile economic situation needs additional funding, particularly from counter-cyclical investors like development finance institutions. Our funding will help bolster the economy and ensure the availability of staple goods, medicines and food across Africa.”
