The African Development Bank (AfDB) Group, Citi and International Finance Corporation (IFC), a member of the World Bank Group, have agreed to provide a US$175m three-year revolving credit facility covering short term trades for exporters and importers in Africa. The agreement builds on the success of a previous similar programme launched in 2010 to help boost economic growth in the region.

The financing is part of the Global Trade Liquidity Programme, a coordinated global initiative launched in July 2009 by IFC, AfDB and Citi that brings together governments, development finance institutions, and private sector banks to support trade in developing markets and address the shortage of trade finance resulting from the global financial crisis.

Citi economists expect Africa to more than double its share of world trade, from 3% in 2010 to 7% in 2050, and the programme addresses the substantial increase in regional trade flows. Under the agreement, Citi will originate US$175m in trade finance transactions from 125 financial institutions across 32 countries in Africa. IFC and AfDB will jointly fund US$70m of the portfolio balance by Citi to provide additional liquidity while the local institutions, in turn, will extend trade financing to importers and exporters.

The short-term, revolving nature of the assets financed could mean a US$70m total impact in trade financing under this programme which, as part of a larger strategy to transform trade finance in Africa, addresses increased demand in the region.