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.