(Ecofin Agency) - The Development Bank of Austria (OeEB) and the European Investment Bank (EIB) launched a €100 million (About $122 million) African private sector COVID-19 resilience investment initiative.
This is the first cooperation between both European-based banks. Through this initiative, both banks will provide funding to multiple financial institutions in sectors including agribusiness, manufacturing, and service. This is in line to address the adverse effects of the pandemic on private businesses and as well contribute to the financial inclusion of SMEs.
“Companies across Africa and Europe are faced with unprecedented challenges caused by COVID-19, with disruption to exports and the need to rapidly change business activity. The European Investment Bank is pleased to join forces with OeEB to provide EUR 100 million to ensure that private sector business across Africa can access long-term financing, create jobs, and invest during these challenging times,” said Werner Hoyer, President of the European Investment Bank.
It is in this light that the Governor of the European Investment Bank views the initiative as a tool to help Africa achieve economic development while in the long run boost trading between Africa and Europe.
Trade between Africa and Europe saw an increasing turn in the balance of trade for the last 5 years until the outbreak of the novel coronavirus. According to data from the bilateral trade between Africa and Europe, Africa’s exports to Europe fell by $32 million and its imports from Europe dropped by $23million from 2019 to 2020. This fall was a result of the COVID-19 pandemic.