This agreement is expected to boost intra-African trade, promote regional integration and contribute to reducing the trade finance gap in Africa, in line with the aspirations of the African Continental Free Trade Area (FTAA).

By establishing this strategic partnership, the two institutions make a joint commitment to supporting economic growth and cross-border trade in emerging African markets, seeking to expand access to financing in the East and Southern Africa region.

Strategic Partnership

This collaboration encompasses a pool of qualified local and regional banks in the Common Market of Eastern and Southern Africa (COMESA) region, stepping up support to the trade finance sector and projecting a boost of around $1,8 billion in trade over the next three years.

“Supporting trade in Africa is a key priority for the ADB.”

“Trade finance is an important driver of economic growth and is fundamental to cross-border trade, particularly in emerging markets.”

“We are delighted to work with TDB, a strong partner with extensive knowledge and a network in Africa, in a common ambition to support trade in the region.”

Said Nwabufo Nnenna, the group's General Director for the East Africa region.

Regional Support

“TDB Group is very pleased to continue to develop its strategic partnership and fit-for-purpose risk-sharing mechanisms with ADB Group.”

“In doing so, we seek to increase trade finance and other offerings in a region where large gaps in access to trade finance continue to exist.”

“Occupying commercial niches where the main international banks have been withdrawing and reducing their appetite for risk”.

ADB also offers local banks a Transaction Guarantee Mechanism (TG) of 3 years to support the confirmation of your trade finance transactions.

About BAD

Present on the ground in 41 African countries, with external representation in Japan, the Bank contributes to the economic development and social progress of its 54 Member States.

ADB’s RPA

It is designed to give regional and international commercial banks and eligible regional DFIs partial risk coverage for their trade finance operations in Africa, with the ADB typically assuming a 50% share of the risk.

The Bank selects its trading partners based on the size of its African portfolio, the breadth of its African market coverage, support for intra-African trade and the quality of its credit approval processes.

Conclusion

By facilitating access to trade finance and promoting strategic partnerships, these institutions are significantly contributing to reducing the trade finance gap and stimulating sustainable economic growth, leading to the construction of a prosperous and interconnected Africa.

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See also:

BAD appoints Ousmane Fall as ONS Director

BAD: Achieves First Place Worldwide

The AfDB and the importance of the PALOP in Africa

Picture: © AfDB / Francisco Lopes-Santos