Time for Africa’s banks to finance continent’s development – IFC

There’s no better time than now for Africa’s banks to rise to the occasion in financing the continent’s trade and development – which has the added opportunity of ensuring food security, slowing down soaring inflation and sustaining jobs while creating new ones, Sérgio Pimenta, Vice President for Africa at the International Finance Corporation (IFC) has said.

Speaking at the 2022 Africa Financial Industry Summit (AFIS) organised by Jeune Afrique Media Group in Lome, Togo, Mr. Pimenta noted that in Africa the trade finance gap is estimated at around US$90billion.

“…Africa’s financial institutions are imperative to the continent’s growth. At this critical time, financial institutions must contribute as an engine for resilience and crisis response for the continent’s transformation.

“Growing supply chain disruptions and rising inflation and food security challenges have caused many international banks to pull back from trade finance. Rather than pull back, however, we need to strengthen access to trade finance to help keep African companies afloat and preserve jobs,” he noted.

IFC, he pointed out, committed a record US$9.7billion globally in trade finance – including through its Global Trade Finance Programme, with banks in Africa receiving some of this financing. “Vista Bank in West Africa was one recipient of our financing. IFC provided US$24million to Vista Bank’s subsidiaries in Guinea and Burkina Faso to help the banks finance imports of foodstuffs, raw materials, equipment and other important goods,” he said.

He added that with IFC’s Africa Trade and Supply Chain Recovery Initiative, an extra US$1billion will be available to support regional trade development, help reduce the trade finance gap and help lessen the continent’s reliance on imports – including in more than 20 fragile and conflict-prone economies on the continent.

Togo’s president comments

Faure Essozimna Gnassingbé, President of Togo, called on banks and financial institutions to step to the fore in helping rebuild Africa after the devastating effects of COVID-19 and the ongoing Russia-Ukraine crisis.

“Banks don’t just fund projects but instead very good projects. After two years of continuous crisis, wasting money cannot be a luxury we can afford. Without the support of banks, how do we build roads, energy plants, etc. to help make the Africa Continental Free Trade Agreement (AfCFTA) a possibility? Our common success depends on collaboration between the government and private sectors.

“Togo is working tirelessly to consolidate its role as a natural gateway to West Africa and a platform for the financial industry at the pan-African level, as part of its 2025 roadmap. This summit is a great opportunity to think about the future of African finance,” he said.

On AFIS 2022 impact

Amir Ben Yahmed, Managing Director of Jeune Afrique Media Group said: “AFIS fills a critical need for the future and sovereignty of the African financial industry. It was necessary to create a platform to serve this sector, so it becomes the engine of growth-policies to accelerate regional integration.

“Bringing together bankers, insurers, telecom operators, fintech, capital market players and regulators is essential if we are to meet these challenges. I would also like to reiterate my gratitude to President Faure Gnassingbé, who was one of the first to believe in this project and support us in its organisation.”

AFIS 2022 is held with ambitions of the continent’s economic recovery through the development of a competitive, innovative, inclusive and sustainable financial industry. The event – organised in partnership with IFC, the World Bank Group’s private sector arm, and the Republic of Togo – brings together more than 800 high-level decision-makers from Africa’s financial sectors.

Over the course of two days, more than 30 conferences, workshops and roundtables allowed African industry leaders to contribute to the continent’s economic recovery. AFIS is positioned as a key forum for dialogue between representatives of the public (ministers of economy and finance, central bankers, regulators) and private sectors (heads of the largest financial institutions, bankers, insurers, fintech and mobile money operators, and capital markets).