Rwandan businesses are set to benefit from a $100 million risk-sharing facility by British International Investment (BII), a development finance institution and Citi, a leading global investment bank to support the trade finance needs of SMEs and corporates in frontier and emerging African economies. The facility is targeted to benefit African economies including Benin, Cameroon, Côte d’Ivoire, Rwanda, Tanzania, Uganda and Zambia to help local business to finance the import of economically productive goods, transport, essential equipment and machinery supporting the emergence of manufacturing industries. Nick O’Donohoe, BII Chief Executive Officer, said the facility will help tackle complex issues such as food security in Africa by extending liquidity solutions to strategic sectors. “Our investment with Citi deepens BII’s footprint across the continent and supports local businesses struggling to maintain and expand operations due to a lack of capital. This empowers local businesses to strengthen supply chains and accelerate the flow of essential trade,” O’Donohoe said in a press statement. Stephanie von Friedeburg, Head of DFI Strategic Partnerships at Citi, said they seek to strengthen trade and food security by bringing solutions that facilitate critical investments to enable economic growth. The investment is expected to address the critical lack of foreign currency in the region by providing trade finance liquidity to Citi’s extensive network of commercial banks, enabling financial institutions to increasingly support African businesses with imports of key commodities such as wheat, fertiliser, rice and sugar. The UK’s Minister for Development and Africa Andrew Mitchell said: “This investment underlines BII’s commitment to supporting fragile economies across Africa in accessing vital goods to support food production, including fertiliser and agricultural machinery,” said Andrew Mitchell, UK’s Minister for Development and Africa. The funding comes as local businesses struggle to secure key imports due to challenges precipitated by the COVID-19 pandemic and the Russia-Ukraine war, which have led to high inflation, rising interest rates and an increase in commodity prices. As a result, the trade finance gap in Africa has increased by approximately a third since the onset of the pandemic, climbing from $81 billion in 2019 to $120 billion in 2023.
