Africa’s Trade and Development Bank (TDB) has signed a $30m agreement with the export finance arm of the Abu Dhabi Fund for Development (Abu Dhabi Exports Office) to bolster trade between the United Arab Emirates and Africa.
According to a statement from the Abu Dhabi Media Office, part of the deal states that Abu Dhabi Exports Office (ADEX) will grant loans through the Trade and Development Bank (TDB) to buyers and importers from the member states for purchasing goods and services from the Emirates.
The trade partnership is the first of its kind to be signed by ADEX with a foreign financial institution and is expected to support both exporters and importers as the global economy faces a rough road to recovery due to the coronavirus pandemic.
According to the acting director-general of ADEX, Saeed Al Dhaheri: “this is not just a difficult time for UAE exporters, but it is also a challenging time for their overseas buyers, particularly smaller importers who cannot access any direct credit facilities from export-financing institutions.”
Dhaheri further said both parties are dealing with liquidity and cash flow issues, delayed supplier payments, and limited access to financing.
He further added that through our partnership with the Trade and Development Bank, we intend to provide a solution to these challenges that enables both the exporter and importer to fund mutually beneficial transactions quickly and easily.
Adex was set up last year by the Abu Dhabi Fund for Development to help foster international trade by providing loans and guarantees to overseas buyers seeking to import goods and services from the United Arab Emirates.
Last month, the Abu Dhabi Fund for Development allocated Dh735 million ($200m) to the Abu Dhabi Exports Office to stimulate economic diversification and boost exports.
The Trade and Development Bank is made up of 22 member countries from Eastern and Southern African states stretching from Egypt in the north to Zimbabwe in the south.
It also includes a number of multilateral bodies as members including the Africa Reinsurance Corporation, the African Development Bank, and the OPEC Fund for Development.
The TDB group managing director and chief executive, Admassu Tadesse, said the trade between the United Arab Emirates and Africa has doubled over the past five years, while it has grown about eight-fold in the past 15 years.
A cooperation agreement was also signed between both institutions to promote trade between the UAE and Africa as both institutions will explore possibilities of co-financing qualifying transactions and establishing additional lines of credit.