On August 12th, the West Africa Trade & Investment Hub announced a rapid response plan to deploy $36 million supplementary funding provided by USAID to mitigate the pandemic’s socio-economic impact in West Africa. This recovery plan includes new Co-Investment funding that targets the private sector and is designed to address critical economic areas through three primary objectives:
Ensure access to finance
Virtually all companies in West Africa are suffering from significant cash-flow disruptions and financial institutions are reluctant to extend credit to distressed companies without some form of risk mitigation. The Trade Hub will provide risk mitigation grants (first-loss) to financial institutions to expand the availability of working capital for SMEs. Co-Investment support will also be provided to firms that assist companies in restructuring distressed financing lines or in obtaining new financing lines to support their operations.
Companies are saddled with the growing costs of implementing new health procedures that protect their employees and customers, combined with reduced demand and revenues due to operational closures resulting from COVID-19. The pandemic has also led to shifts in the types of products they market is demanding. The Trade Hub will, therefore, assist companies that need the equipment and vocational training required to pivot to new types of production in order to sustain their workforce. This may include any physical and operational changes to their operations and processes that allow businesses to safely operate at reduced capacities.
Collaborating with the private sector to develop local solutions
Border closures and export restrictions have caused significant supply shortages for critical medical supplies and services, as well as for agricultural inputs and food staples. The Trade Hub will aim to scale-up companies engaged in the direct response to COVID-19, including companies working in medical apparel and PPE manufacturing. The project will also collaborate with companies that supply agricultural and other products in short supply to local and regional markets impacted by the COVID-19 crisis.
Since April 2020, the Trade Hub has adapted to this new work environment and is developing solutions with the private sector to respond to COVID-19. Almost 150 applications have been received from businesses interested in partnering with the Trade Hub to rapidly respond to the pandemic. The Trade Hub is in the process of evaluating these applications for new Co-Investment partnerships across the region, which will generate new private investment, retain jobs, and stimulate economic growth. Future solicitations will also be launched by the Trade Hub looking for potential partners in the upcoming months.