British lender announces $100m financing pact for Africa
British International Investment (BII), a development lender, announced a $100 million financing agreement with the Eastern and Southern African Trade and Development Bank (TDB) on Monday, aimed at enhancing trade finance, agriculture, and food security in the region, as per a Reuters report.
This funding will support various trade activities, including the import and export of goods, particularly crucial in light of the economic challenges faced by many African nations such as currency depreciation, escalating debt, and inflation exacerbated by factors like climate change.
The importance of increasing capital to bolster trade finance in the region cannot be overstated, as highlighted by research from the African Development Bank (AFDB), which indicates an annual finance gap of up to $120 billion due to the withdrawal of many international lenders from offering such support.
By providing financing to TDB, local companies will gain access to essential resources like fertilisers and machinery, thereby boosting productivity, facilitating cross-border trade, enhancing food security, fostering job creation, and bolstering economic resilience, according to the lender.
Andrew Mitchell, Britain’s Minister for Development and Africa, emphasised that this investment underscores the UK government’s dedication to promoting economic and agricultural progress across Africa.
BII, with investments in over 1,470 businesses in emerging economies spanning 65 countries and total assets of 8.1 billion pounds, outlined its commitment to allocating at least 30 per cent of its new commitments by value to climate finance between 2022 and 2026.
This financing agreement with TDB marks the fourth of its kind and is intended to help address supply chain disruptions and foreign exchange shortages, noted Admassu Tadesse, TDB Group President and Managing Director. Additionally, he highlighted the group’s vital role in ensuring the security of essential commodity supplies, particularly in priority sectors like agriculture and healthcare, often through counter-cyclical interventions.
