A UK’s Development Finance Institution (DFI), British International Investment (BII), and impact investor has announced a $100 million finance facility with the Eastern and Southern African Trade and Development Bank (TDB) to support trade and food security in Africa.
BII said that the investment is designed to strengthen economic resilience in the region by supporting essential trade finance activities, fostering agricultural development and addressing critical challenges such as food insecurity.
It added that the facility will empower TDB to provide financial support to local businesses and financial institutions in several key markets in Africa.
“This allocation of capital is crucial for overcoming the barriers to trade in Africa, including the retreat of international correspondent banks from the continent, and addressing the substantial trade financing gap estimated at $80 billion to $120 billion.
“With improved access to trade finance, businesses can engage more readily in import and export activities, facilitating increased cross-border trade, contributing to food security, and stimulating job creation, economic growth and resilience in Africa,” BII said.
Minister for Development and Africa, Andrew Mitchell said: “This investment underscores the UK government’s commitment to supporting economic and agricultural development across Africa by empowering businesses, stimulating trade, and increasing the flow of essential goods and services.
“This funding will also help to lower trade barriers so that companies across the continent are better able to expand into overseas markets, access vital resources and tackle critical challenges such as food security.”
Head of Office, Kenya, and Coverage Director, East Africa at BII, Seema Dhanani said: “Our collaboration with TDB over the past seven years underscores our commitment to bolstering resilient economies and empowering communities across Africa.
“We are actively pursuing initiatives to deepen capital markets and catalyse innovation in Africa and our collaboration with TDB is instrumental in providing vital liquidity and deepening access to finance.”
Group president and managing director, TDB, Admassu Tadesse said: “TDB Group has been playing an important role in the trade finance space, often working countercyclically to contribute to the security of supply of essential commodities in high priority sectors such as agriculture and healthcare.
“This is the fourth facility we are signing with BII and its predecessor. We are pleased to continue building this strategic partnership, and through this new facility, enhance efforts to address ongoing supply chain disruptions and forex shortages, and their impact on food security.”