Morocco’s BMCE Bank International Plc UK has sealed a $150 million partnership with the International Finance Corporation to bolster cross-border trade in Africa and prevent shortages of essential goods, including grains and building materials amid the Covid-19 crisis.
Under the agreement announced Wednesday, IFC will enter into a risk-sharing facility with BMCE Bank International, a leading regional lender, allowing the bank to support African importers and exporters. The IFC- risk-sharing funding will cover 50 percent of losses on all eligible loans made by BMCE Bank International Plc UK.
The agreement comes as the outbreak of the coronavirus pandemic has plunged Africa into its first recession in 25 years and stymied cross-border trade, with imports falling by an estimated 16% in 2020, according to the World Trade Organization.
Slowing trade can have far-reaching effects because few, if any, countries produce all the goods and services their populations require. Supporting trade in Africa is especially crucial. Ten of the top 20 rice-importing countries globally are located in Sub-Saharan Africa.
Houssam El Hak Morssi Barakat, Head of BMCE International Plc UK said, “We are very delighted to close this agreement with IFC. Thanks to privileged partners like IFC, we will be serving our international and African customers by bridging the trade finance gap between Europe and Africa with a sustainable finance impact.”
For his part, Manuel Reyes-Retana, IFC’s Regional Industry Director for Africa, said the covid-19 crisis has made the export and import of goods more challenging, but goods still need to move across borders to support businesses, feed households, and sustain livelihoods.
“Our risk-sharing facility with BMCE Bank International will support trading and help ensure that Africans continue to have access to essential goods and services”, he underlined.
IFC will provide up to $75 million to the risk-sharing facility under its Global Trade Liquidity Program, to serve financial institutions active in 20 African countries, including six fragile or conflict-affected states.