British International Investment and Deutsche Bank have announced a US$150 million facility to expand trade finance across Africa, targeting high-risk and underserved markets. The program, unveiled on March 16, aims to reduce the continent’s estimated US$100 billion annual trade finance gap, according to Afreximbank.
The initiative uses a risk-sharing mechanism to support local banks in extending trade-related credit to their clients. By providing additional capacity and guarantees, the facility is designed to lower barriers to cross-border trade and enhance industrial development in African markets.
“This partnership strengthens our risk-sharing capacity and enhances our ability to facilitate sustainable cross-border transactions across the African market,” said Anand Jha. “By combining our global platform with BII’s development mandate and regional expertise, we aim to further stimulate trade flows to the continent.”
Prioritizing key markets
The program will focus initially on economies such as Zambia, Ethiopia, and Rwanda. Local banks in these countries will be able to extend more financing to businesses for the import of raw materials and industrial equipment, supporting local production chains and strengthening Africa’s industrial base.
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Many regional banks face challenges in accessing sufficient capital or securing guarantees for trade transactions, particularly in high-risk markets. The new facility addresses these constraints by leveraging international expertise and risk-sharing structures.
“Strengthening trade finance is essential to facilitate the flow of critical goods and raw materials across our markets and to support sustainable growth,” said Ndaba Mpofu. “Expanding access to trade finance will help build a more resilient ecosystem and unlock new economic opportunities across Africa.”
Potential impact on intra-African trade
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Intra-African trade reached $208 billion in 2024, marking a 7.7% increase compared with 2023, according to Afreximbank. Analysts say the new financing program could accelerate this momentum by easing liquidity constraints, improving access to credit, and enabling local businesses to expand production and participate more effectively in cross-border trade.
The facility is also aligned with broader goals to stimulate industrialization, support the growth of supply chains, and enhance economic resilience in Africa. By reducing financing barriers, the program is expected to create opportunities for small and medium-sized enterprises as well as larger industrial operators.
Overall, the $150 million BII-Deutsche Bank facility represents a significant step in bridging Africa’s trade finance gap, enabling local banks and businesses to access the capital needed to support sustainable growth, industrial development, and increased participation in regional and global markets.
This initiative underscores the role of development finance institutions and international banks in leveraging capital, expertise, and risk-sharing mechanisms to strengthen African trade and economic integration.
