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$70 Million Risk-Sharing Agreement: A New Boost for African Businesses and Trade
The African Development Bank (AfDB) and Banque Centrale Populaire (BCP) recently signed a $70 million risk-sharing agreement (RSA). This strategic agreement aims to stimulate private sector financing and boost trade across the African continent, with a particular focus on financial inclusion and support for small and medium-sized enterprises (SMEs).
An Agreement to Strengthen Local Banks
The partnership between the AfDB and BCP allocates a global risk limit to local African banks. This enables them to more effectively support economic operators, particularly SMEs, which are the driving force of economic growth in Africa. By facilitating access to financing and strengthening external trade capacities, this agreement is expected to catalyze nearly €200 million in trade exchanges, contributing to a positive economic dynamic.
Supporting Growth and Competitiveness
According to Mohamed El Azizi, Director General of the AfDB for North Africa, this partnership aims to “unlock the potential of businesses that believe in their continent, invest in it, and create added value and jobs.” Achraf Tarsim, AfDB’s country manager for Morocco, added that this agreement includes objectives to diversify production capacity, enhance competitiveness, and create new job opportunities in Morocco.
A Model of South-South Collaboration
Kamal Mokdad, Director General of BCP and international operations, emphasized that this new agreement represents an ideal model of South-South collaboration. It offers a comprehensive solution tailored to the development needs of pan-African trade and Africa’s trade with the rest of the world. In addition to providing financing solutions, the agreement facilitates the support of commercial transactions of African businesses and promotes better integration of local banks into the international financial system.
Strengthening Trade Capacities
This new RSA will further strengthen BCP’s commitment to financing trade transactions in Africa. It provides BCP with the opportunity to support its clientele and strengthen its relationships with local African banks, which are increasingly facing challenges related to the decline in financing lines and confirmations from foreign correspondents more effectively.
A Shared Vision for Sustainable Development
The partnership between the AfDB and BCP reflects a shared vision of promoting sustainable economic growth and inclusive development in Africa. By empowering SMEs and strengthening trade capacities, this agreement contributes to the broader goal of economic resilience and prosperity across the continent.
In conclusion, this $70 million risk-sharing agreement between the AfDB and BCP marks a significant step towards a more robust and inclusive economic future for Africa. By supporting SMEs and facilitating trade, it paves the way for sustainable growth and enhanced integration of African economies into the global financial system.
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