Angola: African Development Bank Group Approves $10 Million Trade Finance Transaction Guarantee for Banco Fomento de Angola SA (BFA) | African Development Bank

The Board of Directors of the African Development Bank Group has approved a $10 million Trade Finance Transaction Guarantee (TG) to Banco Fomento de Angola SA (BFA). Leveraging BFA’s strategic footprint in Angola, this guarantee will support small and medium-sized enterprises, including women-led businesses.

The move will facilitate the import and export trade financing needs of SMEs and, by extension, strengthen the Angolan credit market. The African Development Bank will provide up to 100% guarantee to participating banks for non-payment risk arising from the confirmation of letters of credit and similar trade finance instruments issued by BFA.

Commenting on the approval, Leila Mokaddem, the bank’s Director General for Southern Africa, said: “The approval of this facility by the Board of Governors enables the African Development Bank to support BFA in financing trade-related transactions, such as the export of agricultural raw materials, imports of raw materials and inputs. This will strengthen BFA’s capacity to finance trade transactions for SMEs and local businesses, providing essential risk coverage to support value chain financing, working capital and export-import transactions.”

Ahmed Attout, African Development Bank officer in charge of the Financial Sector Development Department, stressed the critical need for such support on the continent.

“We are excited about this partnership that will help BFA increase its trade finance support to critical sectors of the Angolan economy by leveraging the capital relief provided by the AfDB’s AAA-rated TG,” he said. “This is in line with the AfDB’s focus on private sector development by providing support to the financial sector,” he added.

Pietro Toigo, the bank’s country manager in Angola, said: “The approval of this transaction is part of the African Development Bank’s efforts to support private sector growth and economic diversification in Angola and to expand lending to disadvantaged segments of the market”

The African Development Bank estimates the annual trade finance deficit for Africa at about $81 billion. Compared to multinational companies and large local companies, SMEs and other domestic companies have more difficulty accessing trade finance. The TG is one of the strategic tools deployed by the Bank to narrow the continent’s trade finance gap.

About BFA:

Founded in 2002, BFA is one of Angola’s large and systemic financial institutions with a significant nationwide reach of operational branches. It continues to leverage its corresponding relationships with international banks to support Angola’s real sector in the post-COVID-19 recovery phase.

Angola has been a shareholder in the Bank since 1977. The African Development Bank in Angola has a $1.05 billion portfolio across four of its High Five priority areas: Power Africa (44%), Improving the quality of life for the people of Africa (31%), Feed Africa (17 %) and Industrialize Africa (8%). Activities are focused on five sectors: energy, agriculture, social, finance, water and sanitation.