Empowering Regional Development: Catalyzing Trade Finance in Eastern and Southern Africa

Eastern and Southern Africa, a region comprising 22 economies, represents an economic landscape with immense untapped potential and diverse characteristics. Despite the region's rich potential, local businesses — particularly small and medium enterprises — have historically struggled to access the international trade finance they need to grow and compete globally. This financing gap has been particularly acute in low-income and fragile and conflict-affected countries, where perceived risks often deter international lenders from providing crucial funding. 

The COVID-19 pandemic exacerbated these challenges, causing significant economic slowdowns across African economies that already faced compounding issues from foreign exchange constraints to non-tariff barriers and credit quality concerns. These obstacles not only hampered growth of individual businesses but also constrained broader economic growth and regional integration. 

Eastern and Southern African Trade and Development Bank (TDB), a multilateral development finance institution, plays a crucial role in bridging this gap. However, the bank itself faced limitations in accessing low-cost funding from international markets. This created a bottleneck that restricted TDB's ability to fully support the region's growing trade finance needs, particularly during a time when such support was critically needed.