AfDB and BOA-Benin Seal €15M Trade Finance Deal to Boost Benin’s Private Sector Growth

On Monday, May 12, 2025, in Cotonou, the African Development Bank (AfDB) and Bank of Africa Benin (BOA-Benin) formalized a strategic €15 million trade finance guarantee agreement. This landmark partnership is expected to enhance trade-related financial activities in Benin and provide vital support to the country's local businesses, particularly in key sectors like agribusiness and light manufacturing.

This transaction reflects a broader commitment by the African Development Bank Group to catalyze private sector development in Benin, reinforcing ongoing governmental efforts to modernize and fortify the country’s financial and industrial landscape. By ensuring smoother access to credit for businesses, especially small and medium-sized enterprises (SMEs), this initiative is set to play a critical role in Benin’s economic transformation.

Enhancing Trade Capacity Through Guarantees

The guarantee agreement, structured as a three-year transaction guarantee facility, will enable BOA-Benin to issue trade finance instruments such as Letters of Credit with the backing of the African Development Bank. The facility is designed to cover up to 100 percent of the risk for confirming banks, making them more willing to support BOA-Benin’s issuance of trade instruments.

This guarantee mechanism is essential for businesses in developing countries, where international confirming banks often view local financial institutions as high-risk counterparts. With AfDB’s support, BOA-Benin can now more confidently facilitate imports, including industrial equipment, production machinery, and telecommunications tools that are vital for Benin’s ongoing industrialization process.

Targeted Support for SMEs and Climate-Resilient Sectors

The facility will provide financing support to a diverse range of businesses—from large local enterprises to SMEs, with a particular emphasis on women-led businesses. Importantly, the AfDB has emphasized that eligible projects under this facility must exhibit low vulnerability to climate risks and minimal greenhouse gas emissions, aligning with the bank’s environmental sustainability objectives.

While agribusiness and light manufacturing are identified as primary sectors for financing, the facility will also accommodate importation of essential goods to address immediate local consumption needs. This multipronged approach seeks to drive both short-term market stability and long-term economic sustainability.

Voices of Leadership and Partnership

Lamin Drammeh, Head of Trade Finance at AfDB, noted that this transaction underscores the Bank’s commitment to providing strategic guarantees that unlock economic potential. “The facility will provide critical support for Benin’s industrial growth by enabling BOA-Benin to issue trade finance instruments that are fully backed, thereby ensuring uninterrupted access to vital production resources,” he explained.

Robert Masumbuko, the AfDB’s Country Manager for Benin, celebrated the agreement as a continuation of the Bank’s longstanding engagement in the country. “Partnering with BOA-Benin, a prominent player in Benin’s trade finance ecosystem, allows us to multiply our impact by supporting enterprises that drive national productivity,” he said.

For BOA-Benin, the agreement is a significant milestone. Abdel Mumin Zampalégré, Managing Director of the bank, expressed his optimism, saying, “This marks the beginning of a direct and productive relationship with the African Development Bank. Trade finance is a core pillar of our strategy, and this partnership enables us to serve Benin’s business community more effectively.”

Strategic Alignment With Development Plans

The guarantee agreement is closely aligned with the African Development Bank’s Country Strategy Paper (CSP) 2022–2026 for Benin. The CSP outlines key priorities, including the transformation of agriculture and promotion of industrial development to enhance food security, boost job creation, and improve the resilience of local economies.

Moreover, the agreement supports Benin’s National Development Plan 2018–2025, which emphasizes the need to elevate economic productivity and competitiveness. By facilitating access to international trade finance, the facility directly contributes to these national objectives.

Looking Ahead: A Sustainable and Inclusive Growth Pathway

This €15 million trade finance guarantee is more than a financial transaction—it represents a critical instrument of economic empowerment. By enabling local businesses to access global markets and import essential industrial inputs, the partnership between AfDB and BOA-Benin is expected to yield broad developmental benefits.

As Benin advances on its journey toward sustainable and inclusive growth, such financial instruments will be key in unlocking the country’s entrepreneurial potential, reinforcing supply chains, and securing the economic resilience needed to thrive in a competitive global landscape.

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