The Bank of Africa Tanzania has signed a US$7.5mn guarantee with the African Development Bank (AfDB) to support the provision of trade finance to local corporates and SME importers.
Under the facility, AfDB will provide a guarantee of up to 100% to confirming banks, covering non-payment risks from letters of credit and other trade finance instruments issued by Bank of Africa Tanzania.
Patricia Laverley, country manager for Tanzania at the Dar Es Salaam-headquartered lender, says the guarantee will “aid priority sectors such as trade, agriculture, manufacturing and energy”.
“This facility will support trade by enabling Bank of Africa Tanzania to play a more strategic role in the regional and international market,” she says.
Deputy managing director Hamza Cherkaoui adds: “This partnership strengthens our ability to support businesses across various sectors by providing seamless trade finance solutions, expanding our confirmation network, and enabling access to top-tier confirming banks.”
AfDB says the facility aligns with its intention to promote regional integration, increase food security and industrialise the continent.
By supporting intra-African regional trade, it also contributes to the objectives of the African Continental Free Trade Area, the multilateral financial institution says.
Tanzania’s Vision 2025 plan aims to increase the country’s economic resilience, while its Country Strategy 2021-2025 focuses on job creation, both of which are also expected to benefit from the facility, AfDB adds.
