African Trade and Supply Chain
Recovery Initiative (ATRI)

International Finance Corporation

African Trade and Supply Chain
Recovery Initiative (ATRI)

International Finance Corporation

This Alliance for Entrepreneurship program aims to reduce continent’s reliance on imports by helping regional and local African banks to augment their trade and supply chain finance delivery.

The ATRI program offers six components (listed below) which support local and regional supply chain disruptions, MSME inclusion, and intra-Africa trade. The components aim to finance suppliers, provide risk sharing, and issue trade guarantees to African banks for critical sectors such as food, agribusiness, healthcare, machinery, and manufacturing. While these components ensure sustainable growth in African economies, ATRI builds capacity by way of training banks to become eligible for the program.

Project Details

The program has six proposed components:

  1. Supply Chain Finance (SCF): Through the ATRI SCF component, IFC aims to support local supply chains impacted by the various COVID-19 economic disruptions and address the SME inclusion target. This component is designed to finance suppliers of local and regional anchor buyers. This product directly aligns with IFC’s broader objectives to invest in local, specialized companies in Africa that bring more production, processing, assemblage and manufacturing onto the continent and help them to grow their suppliers and/or distributor bases and generate jobs.
  2. SME Trade Risk Sharing Facility: IFC would risk-share with local banks on underlying obligors for pre-export or post-import financing, primarily due to constraints such as single obligor limits and/or on additional risk appetite by local banks. IFC will support trade value chains by taking the credit risk of the SMEs/medium-sized corporates, exporters or importers that are existing clients of African banks. The target obligors include the types of companies that require support to grow to bring more capacity onto the continent for greater value-add in trade-related supply chains, for example to develop more pre-export processing, packaging or other forms of value-addition.
  3. Global Trade Liquidity Program/Critical Commodities Finance Program (GTLP/CCFP): ATRI GTLP/CCFP addresses both the trade finance gap and issues of capital constraints for correspondent banks active in trade in Africa. By partnering with regional banks in Africa and international banks with focus on Africa, this component works on a portfolio risk-sharing basis whereby IFC will provide unfunded or funded risk-sharing facilities to support the continued flow of trade transactions in Africa. The portfolios include various goods and essential sectors including food, agribusiness, healthcare, equipment, and manufacturing.
  4. Global Warehouse Finance Program (GWFP): ATRI GWFP aims to support the consistent flow of agricultural-related commodities alongside banks in order to address food security and financing challenges faced by commercial counterparties (producers, processors, and traders) active in African markets. Financing for agricultural producers, traders and processors is increasingly important in the face of rising food and fertilizer costs post Russia’s invasion of Ukraine.
  5. Global Trade Finance Program (GTFP): ATRI GTFP will address the issues of pull back by international confirming banks or correspondent banks from the continent. By providing trade guarantees on a transaction-by-transaction basis where IFC takes the payment risk of local banks in Africa, ATRI addresses the increased lack of country and counterparty risk underwriting availability.. A specific focus will be on intra-Africa trade as well as food, agricultural, and manufacturing products.
  6. Global Trade Finance Program Advisory (GTFP AS): ATRI GTFP AS is an important risk mitigator for GTFP. It prepares banks to be eligible for the program through trade finance related trainings, but also ensures an on-going quality of trade finance knowledge of its participating banks. In multiple SSA countries, the successful completion of training was found to be helpful for banks in complex countries to apply for GTFP. GTFP also opens doors for manufacturing business.
Anticipated Impact

Since the launch of the ATRI program, seven new banks in IDA countries have been onboarded with trade lines totaling US$75 million (utilization to date US$17 million). These banks are in Burkina Faso, Burundi, Guinea, Conakry, Mauritania, and Nigeria. These transactions are the first trade lines in seven years (in the case of Burundi) and the first in six years (in Mauritania and Guinea). More banks are expected to join the GTFP program in the coming months.

The components of ATRI are designed to support MSMEs through supply chain finance, SME trade risk sharing, global trade liquidity, global warehousing finance, global trade finance, and global trade finance program advisor that will result in increased production and processing in Africa, as well as help MSMEs grow their supplier and distributor bases.

IFC will also be risk-sharing with and building capacity of local banks. Furthermore, the program will provide unfunded and funded risk-sharing facilities, support food security, assist agricultural producers, traders, and processors, increase capital constraints for correspondent banks and give finance-related trade training.

Support/Partnership Required

It is expected that this proposed facility will be implemented with the Core Members of the Alliance for Entrepreneurship in Africa. The Alliance will provide an opportunity for its Core Members jointly with IFC to scale up the trade finance guarantee delivery mechanism and facilitate more trade finance availability in countries in Africa where such support is much needed.