AFC and Munich Re Launch a $1B Risk-Sharing Program for African Trade

The Africa Finance Corporation (AFC) and the German reinsurer Munich Re have launched a $1 billion risk-sharing program. This initiative aims to facilitate the financing of imports and exports on the African continent. This major program was launched on October 27, 2026. It addresses the financing needs of African trade, which often faces liquidity and risk constraints imposed by banks.

The program is based on a mechanism for mobilizing unfunded managed debt. This system allows Munich Re to assume a portion of the risks associated with trade finance transactions underwritten by the AFC. Munich Re does not directly provide the funds lent to banks. The two institutions define the criteria and coverage limits in advance, enabling automatic underwriting of eligible transactions and faster decision-making.

The first phase of this program involves 38 financial institutions across 11 African countries. It covers essential instruments for securing payments and financing international trade, such as letters of credit, trade loans, and guarantees. Transactions, with a maximum duration of 12 months, gradually free up their coverage capacity as they are repaid. This makes it possible to finance new transactions.

For the AFC, the challenge is to move beyond the limits of traditional on-balance-sheet financing by mobilizing more private capital. This mechanism also optimizes its own resources. The initiative comes as the African Continental Free Trade Area (AfCFTA) aims to intensify trade among the continent’s economies. This increases the financing needs of African companies and banks.

This partnership builds on a cooperation that began in 2018, which was previously based on sharing risks on a transaction-by-transaction basis. It constitutes a pillar of the AFC’s broader managed debt mobilization program, which is open to other institutional investors. The initiative complements the creation, in August 2026, of AFC Captive Insurance Company, an insurance subsidiary of the AFC. This subsidiary enables the group to manage certain risks internally, while the program with Munich Re facilitates risk-sharing with an external partner.