African banks to be bailed out

The African Development Bank (AfDB) has announced a 1.5 million emergency “bail-out” facility to prevent trade and investment from seizing up, FT has reported. The fund is expected to feed through African companies to help complete projects. Donald Kaberuka, president of the AfDB, said the trade finance facility set up from AfDB’s own capital base was a “radical departure” for the bank – whose mandate is to provide development finance – but one made necessary by the grave impact of the credit crunch on Africa. Before the global crisis intensified last year most credit in the African financial system originated from European banks.