BII partners with Access Bank on $60m trade finance, liquidity for African businesses

*Access Bank Plc explains  the $60 million trade finance facility for the bank and its five other pan-African subsidiaries supports the bank’s strategy to enable continental trade and deepen the commitment of British International Investment to bolstering financing environments in fragile economies

Isola Moses | ConsumerConnect

In a bid to boost import and export capabilities among local businesses and fill the Foreign Exchange (Forex) supply gap, the British International Investment (BII), a Development Finance Institution (DFI) in the United Kingdom (UK), has announced a $60 million trade finance facility for Access Bank Plc and five of its other Pan-African subsidiaries.

Mr. Abdul Imoyo, Spokesman of the bank, disclosed this development in a statement issued Tuesday, October 3, 2023, in Lagos.

Imoyo stated that BII, which is also an impact investor partnership with Access Bank, would strengthen import and export capacities among local businesses and plug the Forex supply gap.

The Spokesman explained that the programme supports Access Bank’s strategy to enable continental trade and deepen BII’s commitment to bolstering financing environments in fragile economies.

Key objectives of $60million trade finance facility

The statement also noted: “BII estimates the loan programme will stimulate African trade volumes by 90 million Dollars.

“The agreement reinforces BII’s ongoing relationship with Nigeria’s largest commercial bank by assets.

“It facilitates the provision of systemic liquidity during a period characterised by a challenging macroeconomic environment.”

Higher inflation and rising cost of capital have placed downward pressure on currency performance, both domestically and in the programme’s target markets, stated Imoyo.

He further listed the programme target market to include: the Democratic Republic of Congo(DRC), Mozambique, Rwanda, Sierra Leone, and Zambia.

Intervention at this critical juncture underlines the key role of BII, and development finance institutions in general, in extending countercyclical support to build economic resilience, the statement said.

Imoyo stated: “Between 80 percent and 90 percent of world trade is estimated to rely on the availability of trade credit, according to the World Trade Organisation.

“Prior to the COVID-19 pandemic, that financing gap stood at 82 billion dollars in Africa, and it is increasing.

“Recognising the positive ripple effects of robust trade flows on economies and livelihoods, Access bank is aiming to provide 15 percent of trade finance across Africa, by growing the trade books of its subsidiaries.”

Access Bank said that currency instability in Nigeria could hinder the wider proliferation of Dollar-denominated trade loans across African markets.

According to him, this also constrains countries’ ability to capitalise on opportunities opening up under the African Continental Free Trade Agreement (AfCFTA).

The leading financial institution noted: “By specifically targeting import dependent economies, many of which will mark the first engagement with BII’s Trade programme.

“The improved availability of US Dollar denominated trade loans will ensure availability of key commodities and manufacturing inputs for the production and export of goods.”

The Access Bank Spokesman disclosed the key outcome would be improving livelihoods and preserving jobs for the employees of importers and exporters with limited access to Foreign Exchange trade loans.

On construction, manufacturing and FMCGs programme

The bank as well stated with the loans channelled into companies in construction, manufacturing and FMCG (Fast Moving Consumer Goods) programme would directly contribute to the UN Sustainable Development Goals eight and nine.

Imoyo further noted that the facility would improve inclusion, which qualifies under the ‘2X Challenge’, aimed at strengthening female participation and leadership in business.

According to him, the bank would ensure that the allocation of loans was designed deliberately to advance its gender commitments.

He said: “In addition, the facility will contribute to BII’s BOLD programme, dedicated to enhancing the availability of finance at more affordable rates to black, African-owned businesses.”

We’ll mobilise resources to support local industries, women-owned businesses, says Kumapayi

Speaking at the meeting, Mr. Seyi Kumapayi, Executive Director, African Subsidiaries of Access Bank, said that the bank was on a purposeful mission to scale intra-African trade and position the continent as a viable market for global trade.

Kumapayi expressed delight on the tremendous potential that the trade finance facility with the BII affords the bank across its pan-African subsidiaries.

The bank’s Executive Director, African Subsidiaries stated that the strategic collaboration, not only strengthens Access Bank’s import and export capabilities but also expands its resources to support local industries, especially women-owned businesses, to drive economic growth.

He also explained: “By stimulating trade volumes, we will be playing a key role in fostering long-term economic resilience for the continent, while increasing attractiveness for increased foreign investments.”

Commenting on inking of the trade finance facility, Mr. Admir Imami, Director/ Head of Trade and Supply Chain Finance at BII, said Access Bank had been a long-standing partner of BII.

Imami stated that the companies new partnership was a significant step closer to narrowing the trade finance gap in Africa, particularly in countries, such as the DRC and Rwanda.

The Director/ Head of Trade and Supply Chain Finance said: “Access to finance in fragile states is hugely constrained. Often these countries are buffeted by macroeconomic events far beyond their control.

“BII and Access Bank share a conviction that building the resilience of these businesses by ensuring affordable access to foreign exchange is vital to keep intra-African trade moving and support the growth of inclusive economies.”

Mr. Benson Adenuga, BII’s Head of Office and Coverage Director for Nigeria, said BII’s latest commitment to Access Bank reiterated its assurance to the leading multinational institution and to Nigeria.

Adenuga noted that the partnership comes at a time when the West African country’s fragile economic situation needs additional funding, particularly from counter cyclical investors like development finance institutions.

He also stated: “Our funding will help bolster the economy and ensure the availability of staple goods, medicines and food across Africa.”

Access Bank Plc is a commercial bank operating through a network of over 700  branches and service outlets, spanning three continents, 20 countries, and serving over 60 million customers.

British International Investment is also an investment partner to businesses in Africa, Asia and the Caribbean.

The BII invests to support the UK Government’s Clean Green Initiative and to create productive, sustainable and inclusive economies in our markets.

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