Million dollar trade finance package for shippers

African trade is set for growth following a decision by the African Development Bank (AfDB) Group, Citigroup and International Finance Corporation (IFC), a member of the World Bank Group, to provide $175 million in trade financing for exporters and importers in Africa to help boost economic growth. The financing, announced in early October, is part of the Global Trade Liquidity Programme, a public-private partnership launched in July 2009 to support trade in developing markets and address the shortage of trade finance following the global financial crisis, according to a statement by the AfDB. In terms of the transaction, Citigroup will originate a $175 million portfolio in trade finance transactions from banks across Africa, focusing on low-income countries. The local banks, in turn, will extend trade financing to importers and exporters. IFC and AfDB will jointly fund 40% of the portfolio to provide Citigroup with additional liquidity. The shortterm, revolving nature of the assets financed could mean a $1-billion total impact on trade financing. The transaction, part of a larger strategy to transform trade finance in Africa, addresses increased demand in the region.