On the sidelines of the 61st Annual Meetings of the African Development Bank, Brazzaville hosted the inauguration ceremony of the ETC Corporation–FAGACE Financial Cluster on May 26. The initiative is being presented as a new risk-sharing mechanism designed to facilitate financing for African economies and strengthen the continent’s financial sovereignty.
As African countries continue to face limited access to capital and high borrowing costs on international markets, financial institutions are seeking new approaches to mobilize investment. Financial executives, investors, and policymakers gathered to discuss a new instrument: the guarantee cluster.
According to participants, Africa continues to face a paradox. Despite its abundant natural resources, youthful population, and the opportunities created by the African Continental Free Trade Area (AfCFTA), the continent still struggles to secure long-term financing needed to support economic transformation.
“While Africa’s annual financing gap exceeds USD 400 billion, the continent nevertheless has an estimated USD 4 trillion in mobilizable domestic savings. Faced with these USD 4 trillion in savings that remain difficult to channel into development, guarantee mechanisms become a central instrument. It is precisely to transform perceived risk and direct these savings toward productive projects that we are launching this guarantee cluster today.”
Emmanuelle Migan, Director of Operations and Portfolio Management at FAGACE – Benin
The ETC–FAGACE Cluster aims to become a risk-sharing platform capable of strengthening investor confidence, supporting small and medium-sized enterprises (SMEs), and facilitating financing for strategic sectors such as agriculture, infrastructure, energy, and digital technologies.
For participants, financial guarantees should now be viewed as a key driver of economic transformation and regional integration.
“Generally, prudential regulations prevent banks from taking excessive risks when SME investors and project promoters cannot provide sufficient collateral. This increases the perceived level of risk and often discourages banks from lending. When banks do assume excessive risk, they expose themselves to sanctions from regulators.”
Hilaire Mavoungou, Budget Advisor to the Minister of Finance – Congo
“In our case, the central bank recognizes 100 percent of the value of guarantees issued by FAGACE. Its partnership with ETC enhances its technical efficiency and expertise, particularly because digital platforms will now be used to access these guarantees. This represents a significant improvement in efficiency for banking sector professionals.”
Francesco de Musso, Chief Executive Officer of BGFIBank RDC – Italy
Since its creation in 1977, the African Guarantee and Economic Cooperation Fund (FAGACE) reports having mobilized more than CFAF 6.5 trillion to support the financing of its member states’ economies.
Through this initiative, African financial sector stakeholders aim to position guarantee mechanisms as a strategic tool capable of reducing the perception of risk associated with Africa, attracting greater investment, and accelerating the financing of the continent’s long-term development.
