TF

Product Launch: The Trade Finance Transaction Guarantee (TG) Instrument

Jul 29, 2021 | Online

Abidjan, 30 July 2021 - The African Development Bank, through its Financial Sector Development’s Trade Finance operations, has launched a Transaction Guarantee instrument designed to provide up to 100% cover for non-payment risk to regional and international banks, for trade transactions initiated by local banks in Africa.

The guarantee will cover an array of trade finance instruments, including confirmed letters of credit, trade loans, irrevocable reimbursement undertakings, avalized bills and promissory notes.

In opening remarks at the virtual launch of the guarantee held 29 July, Bank Director for Financial Sector Development, Stefan Nalletamby stated: “We are excited about this new instrument as it offers us the flexibility to use our strong AAA rated risk bearing capacity to increase access to trade finance and boost intra/extra- African trade on the continent. Our target end-users will be women entrepreneurs, environment-friendly enterprises, Small and Medium Sized Enterprises (SMEs) and local corporates through the facilitation of local participating banks. Priority will be given to low income and transition states.”

The new instrument will provide much needed opportunities for local financial institutions to build relationships with international correspondent banks, increase links to a global network of trade finance partners and reduce the need for cash collateral, thereby increasing access to finance for SMEs across the continent. This intervention is therefore strongly aligned with the Bank’s High 5s, and its financial sector development strategy.  whose main priorities are to broaden and deepen Africa’s financial systems by putting finance at the center of the continent’s productive capacity.

Trade remains an important driver of Africa’s social and economic development despite the persistently huge trade finance gap. This is mostly due to lack of liquidity and risk mitigation facilities across the continent and has been exacerbated by recent market developments, such as increased banking regulations and global shocks like the COVID-19 pandemic.

The launch event was organized in partnership with Making Finance Work for Africa (MFW4A). It included a panel discussion featuring seasoned trade finance experts from IFC, Afreximbank, Ecobank, ODDO BHF,Moza Banco.  The African Development Bank Group board of directors approved the new instrument in October 2020.

The recording is available below. The presentation slides can be accessed using this link: https://www.mfw4a.org/publication/presentation-product-launch-trade-finance-transaction-guarantee-tg-instrument 

For more details about the Bank’s programme, visit: https://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/trade-finance-program

Contact: Amba Mpoke-Bigg, Communication and External Relations Department, email: a.mpoke-bigg@afdb.org

Technical contacts:

B.Nekati@afdb.org   – Southern Africa

M.O.Ba@afdb.org   – Western/ Central Africa

C.Orwothwun@afdb.org   – Eastern Africa

M.Aloui@afdb.org   – Northern Africa

B.Muhati@afdb.org   – Anglophone West-Africa

 


Meet the speakers

Presentations:

M. Eugene Bempong Nyantakyi – Research Economist, African Development Bank.

Eugene Bempong Nyantakyi is Chief Research Economist at the African Development Bank. Before joining the Bank, he was an Economist and Private Sector Development Specialist at the World Bank Group and an Assistant Professor of Trade at Oklahoma State University. His research interests include international trade and finance, and private sector development. He holds a Ph.D. in Economics from West Virginia University. 

M. Charles Orwothwun – Senior Investment Officer, Trade Finance, African Development Bank.

Charles Orwothwun is an ardent private sector investment specialist with over 15 years’ experience in Trade and Project Finance, cutting across Commercial & Development Banking. He is currently the Senior Trade Finance Officer at the Financial Sector Development Department of the African Development Bank Group, based in Abidjan, Ivory Coast. He holds a MSc. Degree in Accounting & Finance from the University of Northampton (UK), MBA from Amity University Uttar Pradesh (India), and a Bachelor degree of Commercemfrom Makerere University. He is a Certified International Trade Finance Specialist (CITF) and Certified Documentary Credit Specialist (CDCS).

Panel discussion:

Ms. Nathalie Louat – Director of Trade & Supply Chain Finance - International Finance Corporation (World Bank Group).

Nathalie Louat is the Director of Trade & Supply Chain Finance in the Financial Institutions Group at IFC, based in Washington. Prior to this role, she was the Senior Manager in charge globally of Innovation, Capital Markets, Insurance and Distressed Assets. She was previously a Senior Manager for East Asia and the Pacific Portfolio Operations, supporting IFC's clients in the financial sector, based in Hong Kong. From 1999 until 2010. Nathalie worked in IFC's Structured Finance Department within the Treasury Vice-Presidency. She is a member of the IFC Financial Institutions Group's management team. Nathalie received the World Bank Group's Diversity and Inclusion Leadership Award in 2012. Prior to joining IFC, Nathalie pursued a career with Credit Lyonnais Investment Banking after spending several years with the French Ministry of Finance. She holds a degree from the French School of Statistics and Economics and graduated as an Actuary from the Paris Institute of Actuarial Studies.

Ms. Uju Okafor – Senior Manager, Trade Finance, Anglophone West Africa, Afreximbank.

Uju Okafor is Senior Manager, Trade Finance, at African Export-Import Bank (Afreximbank). She has over 16 years’ banking experience, with competencies in business development, trade finance, treasury and legal services. Before her current role, she worked as Manager, Client Relations at Afreximbank with responsibilities for business development in the Financial Institutions, Oil & Gas, Maritime, Telecoms, Infrastructure, Agriculture, Medical, Hospitality and Public Sector Groups across the Anglophone West African countries. Prior to that, she was the Head of Correspondent Banking at Diamond Bank Plc, Lagos, Nigeria. Ms. Okafor holds Master of Laws and Bachelor of Laws degrees from the University of Ibadan, Nigeria. She is a member of the Institute of Chartered Secretaries and Administrators and holds the ACI Dealing Certificate from the Financial Markets Association, France.

M. Florian Witt – Managing Director, Managing Director, Divisional Head International and Corporate Banking, ODDO BHF Aktiengesellschaft, Germany

Florian WITT is the head of ODDO BHF’s International Banking. The business division combines trade and export finance, strategic international clients, correspondent banking business as well as selected capital markets activities. Before joining ODDO BHF, he was a Managing Director at Commerzbank: After developing and heading Commerzbank’s African corporate and institutional franchise including the set-up of various offices on the ground, he became Head of Business Management of the global transaction banking and FI area. Until 2006, he worked at Deutsche Bank as a Global Relationship Manager within Deutsche’s FIG. He started his career at Deutsche Bank within Asset and Wealth Management in Frankfurt Head Office as well as in Hong Kong Branch. Florian WITT is member of the supervisory board of the AKA European Export and Trade Bank. Florian WITT holds a Master in Business Science (Corporate Finance, Banking, International Management) from University of Muenster, Germany. During his studies, he was also trained at AfDB in Abidjan.

Mr. ASHONG-KATAI Sebastian – Group Head, Financial Institutions & International Organisations, Ecobank Transitional Incorporated (ETI), Togo.

Sebastian has been the Group Head for the Financial Institutions and International Organizations (FIIO) client segment at the Ecobank Group since May 2010. In this role, amongst other things, Sebastian has managed the Ecobank Group’s global correspondent network to support a diverse business that covers FIs across 36 countries in Africa. He also manages the Group’s relationship with key NGOs, multilateral organizations, development finance institutions, international corporates operating globally and regionally in Africa. Prior to joining Ecobank, he worked with the Standard Bank of South Africa, where he was a member of the Investment Banking Africa coverage team. At SCB, he spent five years during which time he worked in Singapore, London and across West Africa in a combination of Risk Management and Business Development roles. He subsequently moved to Citigroup, where he covered Ghana, Eastern Africa and Southern Africa over a 5-year period as a VP in the Non-Presence Countries and Financial Institutions business. During this period, he financed and provided banking solutions to several financial institutions, sovereigns and non-profits across Africa. Sebastian holds a BA in Economics & Accounting from the University of Ghana and a MSc. in Shipping, Trade & Finance from the Sir Costas Grammenos International Centre for Shipping, Trade & Finance at the Cass Business School, City University, London.

Mr. Lamin Drammeh – Division Manager, Trade Finance, African Development Bank.

Mr Lamin Drammeh has more than 25 years of professional experience and is currently Head of Trade Finance at the African Development Bank. He is a pioneer member of the Bank’s Trade Finance Program in 2012. Lamin also held executive management roles at Standard Chartered Bank Gambia, first as Director of Global Markets (Treasurer) in 2002 and subsequently as Director of Wholesale Bank (Treasury and Corporate Banking combined). He is a Fellow of ACCA, UK and a Chartered Governance Professional of The Governance Institute of England. He has an MBA from the International University of Japan and BSc Econ (honours) from Fourah Bay College in Sierra Leone.