- BII and Citi secured a US$100 million facility to boost trade finance needs for SMEs in African countries
- This investment contributes to the United Nations’ Sustainable Development Goals 1, 2 and 8, No Poverty, Zero Hunger, and Decent Work & Economic Growth
- This facility will deepen BII’s footprint across the continent and support local businesses struggling to maintain and expand operations due to lack of capital
US- The British International Investment (BII) has announced the signing of a US$100 million risk-sharing facility with Citi to support the trade finance needs of SMEs and corporates in frontier and emerging African economies.
The initiative was announced during a signing ceremony in Washington at the World Bank’s Spring Meetings and is expected to provide a boost to businesses with high potential but limited by a lack of finance.
The investment seeks to address the critical lack of foreign currency in the region by providing trade finance liquidity to Citi’s extensive network of commercial banks, enabling financial institutions to increasingly support African businesses with imports of key commodities such as wheat, fertiliser, rice and sugar.
The BII and Citi facility will help local businesses in underserved markets to finance the import of economically productive goods, transport, essential equipment and machinery, supporting the emergence of manufacturing industries in frontier and emerging economies, including Benin, Cameroon, Côte d’Ivoire, Rwanda, Tanzania, Uganda and Zambia.
The funding comes as local businesses struggle to secure key imports due to challenges precipitated by the COVID-19 pandemic and the Russia-Ukraine war, which have led to high inflation, rising interest rates and an increase in commodity prices.
Join over 10k partners and investors in Africa in our weekly emailing subscription list
As a result, the trade finance gap in Africa has increased by approximately a third since the onset of the pandemic, climbing from US$81 billion in 2019 to US$120 billion in 2023.
BII has supported businesses in Africa since 1948 and Citi opened its first office in the continent in 1920.
The new facility leverages their combined expertise and will potentially deepen Citi’s relationships with over 200 local banks, which, in turn, can empower ambitious companies facing severe funding constraints in harder-to-reach markets.
Subscribe to our YouTube channel for more in-depth industry interviews
The UK’s Minister for Development and Africa, Andrew Mitchell, said:
“This investment underlines BII’s commitment to supporting fragile economies across Africa in accessing vital goods to support food production, including fertiliser and agricultural machinery. By investing in countries where support is most needed, BII continues to take a lead in the fight against food insecurity.”
According to BII’s CEO Nick O’Donohoe, the investment with Citi deepens BII’s footprint across the continent and supports local businesses struggling to maintain and expand operations due to lack of capital.
“The facility is a testament to our commitment to tackle complex issues such as food security in Africa by extending liquidity solutions to strategic sectors. This empowers local businesses to strengthen supply chains and accelerate the flow of essential trade,” added O’Donohoe.
Also read: BII’s Globeleq to Build Africa’s Largest Standalone Battery Energy Storage System in SA
The Head of DFI Strategic Partnerships at Citi, Stephanie Von Friedeburg, said:
“Citi is proud to work with BII in seeking to strengthen trade and food security in frontier and emerging African economies. Today’s announcement brings together BII’s long history of support in the region with Citi’s unique cross-border vantage point.”
Friedeburg added that the Group understands the transformative potential of global trade and is committed to bringing solutions that facilitate critical investments to enable economic growth.
This investment contributes to the United Nations’ Sustainable Development Goals 1, 2 and 8, No Poverty, Zero Hunger, and Decent Work & Economic Growth.
Also read: USAID Launches Africa Trade Desk through Prosper Africa
Subscribe to our weekly newsletter and get industry reports and deals happening in Africa.