AfDB, Citi and IFC Enter New Agreement to Support Trade Finance in Africa
Tuesday, October 16, 2012
London – October 4, 2012 – The African Development Bank (AfDB) Group, Citi and International Finance Corporation (IFC), a member of the World Bank Group, have agreed to provide a $175 million thre-year revolving credit facility covering short-term trades for exporters and importers in Africa. This agreement builds on the success of a previous similar program launched in 2010 to help boost economic growth in the region.
The financing is part of the The Global Trade Liquidity Program (GTLP), a unique, coordinated global initiative launched in July 2009 by IFC, AfDB and Citi that brings together governments, development finance institutions (DFIs), and private sector banks to support trade in developing markets and address the shortage of trade finance resulting from the global financial crisis.
As Citi Economists expect Africa to more than double its share of world trade from 3% in 2010 to 7% in 2050, the program addresses the substantial increase in regional trade flows. Under the agreement, Citi will originate $175 million in trade finance transactions from 125 financial institutions across 32 countries in Africa. IFC and AfDB will jointly fund $70 million of the portfolio balance by Citi to provide additional liquidity while the local institutions, in turn, will extend trade financing to importers and exporters.