Ghana, others to benefit from $150m AfCFTA facility
Ghana, Senegal, Angola, Botswana, and several other African nations are poised to benefit from a $150 million financial facility aimed at de-risking the financial ecosystem within the African Continental Free Trade Area (AfCFTA).
The initiative, driven by the African Development Bank (AfDB) in collaboration with the Trade Development Bank (TDB), seeks to enhance trade and stimulate economic growth across the continent.
The facility focuses on countries outside traditional commercial regions served by TDB, particularly in East, North, and Southern Africa. Key sectors for investment include agriculture, food security, energy, manufacturing, telecommunications, and services.
Strategic Agreement to Promote Continental Trade
The landmark agreement was signed on December 6, 2024, during the Africa Investment Forum (AIF) Market Days in Rabat, Morocco. At the signing ceremony, Mr. Ahmed Rashad Attout, Director of the Financial Sector Development Department at AfDB, emphasized the strategic importance of the partnership.
“This agreement marks a significant step in facilitating transactions that could catalyze approximately $1.8 billion in trade across the continent. It is a crucial step in empowering businesses, including those led by women, and providing greater access to trade products,” Mr. Attout said. He added that the collaboration is aligned with AfCFTA’s implementation, paving the way for future financial products and risk participation agreements to support a broader range of sectors.
Supporting Private Sector Development
Ms. Wegoki Mugeni, Chief Operating Officer for East Africa at TDB, highlighted the vital role the facility will play in managing financing risks and supporting private sector growth.
“This facility is pivotal in supporting sectors that drive GDP, helping to deepen intra-African trade and fostering development that will raise living standards across the continent,” Ms. Mugeni stated. She noted that the initiative would particularly benefit private sector companies seeking to expand their operations across Africa, ensuring access to financial tools and risk mitigation strategies.
Empowering Low-Income Countries
The facility is also designed to benefit low-income countries by boosting the fiscal credit available to businesses and financial institutions in these regions. By targeting key sectors that contribute to economic resilience, the initiative aims to empower African nations to fully capitalize on opportunities within the AfCFTA framework.
Transformative Impact on Trade and Economic Development
The $150 million facility is expected to drive significant changes in Africa’s trade and development landscape. By addressing financial risks and fostering strategic partnerships, the initiative will ease the movement of goods and services, enhance regional integration, and contribute to sustainable economic growth across the continent.
As the largest free trade area globally, AfCFTA offers African countries a unique platform to strengthen economic ties and unlock their collective potential. Initiatives like this facility demonstrate the commitment of institutions such as the AfDB and TDB to advancing these goals.
Looking Ahead
Both AfDB and TDB have indicated that this partnership is just the beginning of a larger, ongoing collaboration. The expansion of trade finance products and risk-sharing mechanisms will continue to be critical to achieving the ambitious objectives of AfCFTA.
As countries like Ghana prepare to leverage this new facility, the initiative is set to accelerate progress toward a more integrated and prosperous African continent.
