AfDB and Bank of Africa SA Sign €50M Risk-Sharing Pact to Boost SME Trade Across Africa

The partnership is expected to catalyze up to €200 million in commercial trade, providing critical support to African businesses involved in cross-border operations.

The African Development Bank (AfDB) and Bank of Africa SA have entered into a landmark €50 million risk-sharing agreement to bolster private-sector financing and facilitate African trade. The agreement was formalized on December 4, 2024, during the Africa Investment Forum (AIF) Market Days in Rabat, Morocco.

This initiative is designed to enhance trade financing opportunities for small and medium-sized enterprises (SMEs) across more than 20 African countries, including transition economies. SMEs in industries such as agriculture, pharmaceuticals, automotive, transport, and telecommunications will benefit from increased access to funding and credit lines.

The partnership is expected to catalyze up to €200 million in commercial trade, providing critical support to African businesses involved in cross-border operations. This initiative aligns with the broader objectives of the African Continental Free Trade Area (AfCFTA) to promote intra-African trade and economic integration.

Facilitating SME Growth and Financial Inclusion

Under the agreement, Bank of Africa SA will expand financing and confirmation lines for local banks engaged in international trade. The goal is to empower SMEs to scale their operations and compete in global markets.

“We are working together in Morocco and across the continent to enhance financial inclusion for SMEs engaged in foreign trade, offering them the resources to realize their potential on a larger scale,” said Ahmed Rashad Attout, Director of the African Development Bank’s Financial Sector Development Department.

This is the first partnership of its kind between the AfDB and Bank of Africa SA, underscoring a shared commitment to SME growth and regional economic development.

Building Capacity for Inclusive Growth

Khalid Nasr, Executive General Manager for Morocco and Corporate & Investment Banking at Bank of Africa SA, emphasized the transformative potential of the partnership.

“This agreement will facilitate finance access for African SMEs, creating new growth opportunities. Collaborating with the African Development Bank, a prestigious institution, will boost the African economy and support inclusive, sustainable growth.”

Additional Benefits and Broader Impact

The risk-sharing agreement is also expected to strengthen relationships between African banks and their foreign counterparts, thereby fostering an environment conducive to sustainable trade and economic resilience. Beyond financial inclusion, this partnership contributes to job creation, technological advancement, and supply chain integration in key sectors.

Strategic Context

The initiative comes as Africa prioritizes industrialization and economic diversification to address trade imbalances and unlock growth potential. With this agreement, the AfDB continues its mission to advance development finance and drive sustainable economic growth across the continent.

The partnership also aligns with the Bank of Africa SA’s vision to be a key player in financing Africa’s economic transformation while addressing the challenges faced by SMEs in accessing credit.

As part of the collaboration, the two institutions will explore further opportunities to strengthen regional trade frameworks and expand support for SMEs, solidifying Africa’s role as a global economic hub.