Ecobank Malawi Secures A $10 Million Trade Finance Guarantee To Boost The Country's Food Security
published on 15 December 2023
Proparco has just signed a $10 million Trade Finance Guarantee with Ecobank Malawi. The Guarantee will enable the bank to secure confirmation lines on Letters of Credit for importation of strategic commodities such as fertilizers, basic foodstuffs and strategic raw materials. It will thus help to facilitate the development of Trade relations between Malawian importers and international exporters – a crucial enabler for Malawi's economic growth!
Proparco guarantees suppliers against the risk of non-payment, thereby strengthening the capacity of Malawi's importers. The Guarantee primarily covers fertilizer imports for small-scale agricultural producers as well as other products such as critical commodities, equipment goods, etc.
This facility forms part of the FARM initiative launched in 2022 by Emmanuel Macron, President of the French Republic, alongside the European Union, the G7 and the African Union, aimed at ensuring food security in the most vulnerable countries. It will provide a strong response to Malawi's food insecurity challenges, exacerbated by the Russia-Ukraine war and Cyclone Freddy in February 2023.
Ecobank Malawi Limited is a subsidiary of Ecobank Group, with which Proparco has built a solid, reliable and dynamic partnership over the years. After a pilot Trade Finance project launched in 2017 with Ecobank Group subsidiaries in Guinea and Ivory Coast (and their French subsidiary as confirming bank), Proparco is happy to be expanding this partnership with the Ecobank group in Malawi.
The French Minister of State, Chrysoula Zacharopoulou, says:
“France’s commitment for food security is long lasting and wide-ranging. As we aim at reinforcing our partnership with Malawi, I am delighted that one of the first actionable solutions we will roll out precisely targets SDG 2 – Zero Hunger through the guarantees provided by our operator Proparco to Ecobank Malawi.”
Dr Raymond Fordwuo, Managing Director of Ecobank Malawi, says:
“The emphasis on fertilizer underscores our commitment to supporting sectors crucial for Malawi's economic development. By facilitating the importation of this strategic product, we contribute not only to the growth of businesses and the Agric sector; but also to the overall prosperity and well-being of the Malawian people. This initiative is a testament to Ecobank Malawi's vision of being a key player in fostering economic growth and facilitating Trade. We are not merely a bank; we are a partner in progress, dedicated to shaping a future where Ecobank is synonymous with excellence in Trade facilitation.”
Steven Gardon, Regional Director for Southern Africa and the Indian Ocean at Proparco, says: "We are very pleased to extend our partnership with the Ecobank Group in Malawi. This will help strengthen economic resilience and food security in the country. This project is in line with Proparco’ s 2023-2027 strategy Acting together for greater impact, which aims to improve access to economic opportunities and strengthen the resilience of local economic systems."
The project will have a positive impact on food security, poverty reduction, decent work and economic growth, thus contributing to the achievement of three sustainable development goals: SDG 1 (eradicate extreme poverty), SDG 2 (zero hunger) and SDG 8 (develop a universal partnership for development).
The signing ceremony took place in Lilongwe, in the presence of Chrysoula Zacharopoulou, French Minister of State for Development, Francophonie and International Partnerships; David Martinon, French Ambassador to Malawi; Audrey Rojkoff, Regional Director for Southern Africa of Agence Française de Développement (AFD) and Symon Msefula Board Chairman for Ecobank Malawi.
