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 was presented as a new risk-sharing instrument designed to facilitate the financing of African economies and strengthen the continent’s financial sovereignty.
Faced with limited access to capital and the high cost of credit on international markets, several African institutions are now seeking to change the paradigm. Financial executives, investors, and public decision-makers gathered to discuss a new instrument: the guarantee cluster. According to the organizers, Africa continues to face a paradox. Despite its abundant natural resources, youthful population, and the opportunities offered by the African Continental Free Trade Area (AfCFTA), the continent still struggles to mobilize long-term financing to support its economic transformation.
“While the continent’s annual financing gap exceeds USD 400 billion, Africa nevertheless has mobilizable domestic savings estimated at nearly USD 4 trillion. Faced with these USD 4 trillion in savings that are still not being effectively channeled toward development, the guarantee mechanism becomes a key instrument. One of the objectives of launching this guarantee cluster today is precisely to transform risk and direct this savings pool toward productive projects.”
Emmanuelle Migan, Director of Operations and Portfolio, FAGACE – Benin
The ETC–FAGACE Cluster aims to become a risk-sharing platform capable of strengthening investor confidence, supporting SMEs, and facilitating financing for strategic sectors such as agriculture, infrastructure, energy, and digital technology. For participants, financial guarantees should now be regarded as a genuine driver of economic transformation and regional integration.
“Generally, prudential ratios prevent banks from taking excessive risks when investors and SME promoters do not provide sufficient banking guarantees. This can increase perceived risks and make banks reluctant to lend. Alternatively, when banks take on too much risk, they expose themselves to sanctions from the regulator.”
Hilaire Mavoungou, Budget Adviser to the Minister of Finance – Congo
“In our case, the central bank recognizes 100% of the value of guarantees issued by FAGACE. Its alliance with ETC enhances its technical efficiency and expertise, simply because today digital platforms will be used to access these guarantees. This means greater efficiency for us as players in the banking sector.”
Francesco de MUSSO, Managing Director, BGFIBank DRC – Italy
Since its creation in 1977, the African Guarantee Fund for Economic Cooperation (FAGACE) says it has mobilized more than6.5 trillion FCFA to support the financing of the economies of its member states. Through this initiative, African financial sector stakeholders aim to make guarantees a strategic tool capable of reducing the perceived risk
