Ghana, others to benefit from US$150m AfCFTA risk participation facility

Ghana and other countries will benefit from a US$150 million facility aimed at derisking the financial ecosystem as part of the implementation of the African Continental Free Trade Area (AfCFTA).

Senegal, Angola, and Botswana are the other countries that are “out of the commercial regions” of the Trade Development Bank (TBD) and can benefit from the risk participation facility.

The agreement will also benefit countries in East, North, and Southern Africa. It covers areas such as agriculture and food security, energy security, manufacturing, telecommunication, and services.

This is through the instrumentality of the African Development Bank (AfDB) and the Trade Development Bank, who signed a risk participation agreement on the margins of the 2024 Africa Investment Forum (AIF) market days, on Friday, December 6, in Rabat, Morocco.

Speaking at the signing ceremony, Mr Ahmed Rashad Attout, Director, the Financial Sector Development Department (AfDB), said the agreement was a strategic partnership aimed at working together for more impactful transactions.

He said the participation facility would allow AfDB and TDB to catalyse approximately US$1.8 billion in terms of trade across Africa, in support of access to finance by businesses, including women-owned as well as trade products.

“It’s part of our implementation of the Africa Continental Free Trade Area. So, we see this as really the beginning of a much larger and wider relationship. We also expect that we’ll be expanding the range of products that we are able to support under this risk participation agreements,” said Mr Attout.

Ms Wegoki Mugeni, Chief Operating Officer, East Africa, TDB, explained that the idea was for the two banks to share the financing risks and support, especially private sector companies focused on expanding their operations across Africa.

She said the risk participation facility would assist key sectors that drove Gross Domestic Product (GDP) to deepen intra-African trade support the development of the continent and uplift the living standards of its people.

“Going forward, the Bank will ensure that we continue to support financial institutions in low-income countries and expand the fiscal credit available to the private sector as well as other sectors in the region,” she said.