How British International Investment is supporting African businesses

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SMEs are the life source of employment in Africa, and BII is helping to finance them

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We also provide trade finance lines through a number of the pan-African banks which are utilised by SMEs across the continent such as our $100 million risk-sharing facility with Citi Bank to support local businesses in frontier and developing economies. What challenges and risks do you foresee in the African market, and how does BII navigate and mitigate them?

Overall, the cost of capital has escalated around the world, particularly in the last 18-24 months. In Africa particularly, the cost of doing business remains prohibitive in parts of the continent and this is mainly because of the lack of basic infrastructure such as paved roads, electricity, transparent framework etc. Currency devaluation and therefore related risk have also constrained opportunities for exits in investments.

Political risk remains in sharp focus, but by leveraging the deep local partnerships I just referred to, we can better manage risks that present themselves. This helps us respond to and design innovative platforms to boost investment, for example in clean energy such as Globeleq, and Gridworks. Our investment tool kit includes equity, debt, guarantees, syndication models, and capital market instruments such as bonds.

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