The African Development Bank (AfDB) has approved a $4 million trade finance guarantee aimed at stimulating growth among small and medium-sized enterprises (SMEs) and local businesses in Sierra Leone. The guarantee, rated AAA, will enable Access Bank Sierra Leone Limited (ABSL) to secure trade finance transactions, offering full protection against non-payment risks from international confirming banks.
This critical financing mechanism will facilitate the importation of essential goods such as rice, cereals, cooking oil, and other vital commodities, supporting key sectors of the economy. The initiative is expected to unlock approximately $36 million in trade over the next three years and align with the broader goals of the Africa Continental Free Trade Area (AfCFTA) by fostering intra-regional trade.
Lamin Drammeh, Head of Trade Finance at the African Development Bank, highlighted the significance of the deal: “This facility is a game-changer for Sierra Leone’s private sector. By bridging key financing gaps, we are enabling local businesses to engage more actively in both regional and global markets, creating jobs and driving economic development.”
Access Bank Sierra Leone’s Managing Director, Ganiyu Sanni, expressed optimism about the potential impact of the guarantee. “This support will allow us to expand our trade finance portfolio and directly aid critical sectors such as agribusiness and the importation of key soft commodities,” Sanni said.
The African Development Bank’s trade finance guarantee, introduced in 2021, is part of a broader suite of financial instruments designed to help local banks across Africa mitigate risks associated with trade. The guarantee leverages the AfDB’s AAA rating to provide coverage for a range of financial products, including letters of credit, trade loans, and promissory notes, all aimed at stimulating intra-Africa trade.
The facility is available to eligible African banks that pass the AfDB’s due diligence process and can be accessed to support both importers and exporters.
