Casablanca – The African Development Bank (AfDB) and Morocco’s Bank of Africa (BOA) have signed a $51.5 million risk-sharing agreement aimed at strengthening financing for the private sector and boosting intra-African trade. The agreement was formalized on Wednesday in Rabat, during the Africa Investment Forum (AIF), which runs through December 6, 2024.

The partnership will enable BOA to enhance its support for local banks across Africa by expanding their financing capacity for international operations. Through risk-sharing agreements, both institutions can jointly manage financial risks, facilitating investment in higher-risk sectors while reducing individual exposure.

The deal is expected to provide essential resources to support key industries, including agriculture, pharmaceuticals, automotive, transportation, and telecommunications, at a larger scale. By increasing funding lines and confirmations with foreign correspondents, BOA will be able to expand its role in facilitating cross-border trade.

AfDB’s Director of Financial Sector Development, Ahmed Rashad Attout, emphasized the wide-reaching impact of this collaboration, noting that the partnership aims to generate approximately $206 million in trade, supporting small and medium-sized enterprises (SMEs) in roughly 20 African countries.

“This partnership will play a critical role in enhancing financial inclusion for SMEs engaged in international trade, giving them the tools to scale up their operations and unlock new growth opportunities,” Attout said during the signing ceremony.

Khalid Nasr, Executive Managing Director of BOA for Morocco and Corporate Investment Banking, praised the partnership as a key step in BOA’s ongoing commitment to advancing African trade and fostering economic growth. He highlighted how the agreement will improve SMEs’ access to financing and provide them with greater opportunities for expansion across the continent.

The agreement reflects the theme of the AIF 2024, “Leveraging Innovative Partnerships for Scaling Up,” which aims to support Africa’s economic transformation through strategic investments. By facilitating the growth of SMEs, the partnership between AfDB and BOA is poised to contribute to a more inclusive and sustainable economic future for Africa.