MIGA Boosts Senegal's Agricultural Sector
WASHINGTON, April 24, 2024 –The Multilateral Investment Guarantee Agency of the World Bank Group (MIGA) has issued a guarantee of €298.5 million to Standard Chartered for its short-term loan to the government of Senegal. The guarantee will protect against the risk of non-payment by the government for up to three years.
The project will finance trade transactions supporting the country’s food security and agricultural sector. Over half of Senegal’s GDP is attributed to trade flows, with raw materials comprising over 50% of exports and more than 15% of imports. The project will bolster the government’s efforts in facilitating trade-related activities to improve food security.
The guarantee will support trade-related payments for agricultural inputs such as seeds, fertilizers, and equipment, as well as outputs including peanuts, rice, and horticultural products, by farmers, cooperatives, and corporations.
"MIGA’s guarantee will support Senegal to boost agriculture productivity and create jobs," said Hiroshi Matano, MIGA Executive Vice President. "Our short-term guarantees play a crucial role in attracting private capital, especially in key economic sectors like agriculture."
MIGA’s guarantee will provide the Senegalese government with much-needed access to trade finance to support trade activities, particularly in the agribusiness sector, which contributes to 16% of its GDP and employs more than 36% of its total labor force.
Alper Kilic, Global Head, Project & Export Finance at Standard Chartered Bank said: “After the successful closing of our MIGA-supported facility for Senegal’s Dakar Port in 2023, we are delighted to partner again with MIGA, this time to finance the agriculture sector in Senegal. Agriculture continues to be one of the most important sectors of economic activity in the country. We are proud to bring to fruition innovative financing solutions to foster trade and economic development for our client, the Government of Senegal.”
Senegal lies within the drought-prone Sahel region, with irregular rainfall and generally poor soils. As a result, it relies on imports to meet around 70 percent of its food needs. One of the major constraints to the development of the agriculture sector's development is the lack of access to both traditional and digital financial services. This is due to the sector's high-risk nature, and the farmer’s lack of collateral and creditworthiness. The project will play a pivotal role in stabilizing the overall market by alleviating financial constraints faced by local small and medium-size entrepreneurs in the agricultural sector. Increasing agricultural productivity is key to Senegal achieving more inclusive growth, as well as to national and regional food security.
About Standard Chartered
Stanford Chartered is a leading international banking group, with a presence in 53 of the world’s most dynamic markets and serving clients in a further 64. Its purpose is to drive commerce and prosperity through its unique diversity, and its heritage and values are expressed in its brand promise, here for good. Standard Chartered PLC is listed on the London and Hong Kong stock exchanges. For more stories and expert opinions please visit Insights at sc.com. Follow Standard Chartered on X, LinkedIn, Instagram and Facebook.
About MIGA
MIGA was created in 1988 as a member of the World Bank to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over $81 billion in guarantees across 123 developing countries, supporting more than 1,000 projects. Over the past decade, MIGA’s guarantees have helped provide new or improved electricity services to more than 78 million people.
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Contact:
In Washington:
Elizabeth Howton, (202) 458-5922 or ehowton@worldbankgroup.org