The African Development Bank Group (AfDB) approved a $29 million trade finance facility for Cameroon's Crédit Communautaire d'Afrique-Bank (CCA-Bank) to boost the economy, with a portion of the funds earmarked for the country's telecom industry.
According to the AfDB, the financing was approved during a board meeting on December 1 in Abidjan, Côte d'Ivoire, and would be used as a transaction guarantee, a bank group product that provides risk coverage to qualifying African banks for trade finance transactions.
The investment particularly earmarks a portion for the purchase of crucial telecom equipment, addressing an essential demand for infrastructure upgrades in the country, and represents the AfDB's first direct financing support to the CCA-Bank.
This comes as the telecoms ecosystem in the Central African nation faces significant challenges, including having some of the slowest internet speeds in the continent, partly due to underinvestment and power availability issues.
The sector is also capital-intensive, requiring constant investment in new equipment to keep pace with rapid technological advancements.
Additional to the telecoms sector, the financial injection will also target equipment imports for industrial and agro-industrial sectors.
To further boost the economic activities, the investment will also enable CCA-Bank to expand its trade finance offerings to small and medium-sized enterprises (SMEs) and other businesses.
AfDB highlighted that the initiative is in line with the institution's ambition to increase its direct interventions in favour of the private sector in Cameroon.
"The facility will support Cameroon's economy by facilitating imports of equipment for the industrial, agro-industrial and telecommunications sectors,” said Lamin Drammeh, head of the AfDB’s Trade Finance Division.
He went on: “It will also enable the AfDB to provide up to a 100% guarantee to confirming banks, to facilitate the confirmation of letters of credit and other similar trade finance instruments issued by CCA-Bank for the benefit of SMEs in Cameroon.”
Marguerite Fonkwen Atanga, MD of CCA-Bank, welcomed this debut direct financing support from the organisation.
“This strategic partnership marks a major milestone for our institution and will significantly strengthen our capacity to support small and medium-sized enterprises, women entrepreneurs and start-ups in Cameroon and Africa."
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