The Middle East and North Africa (Mena) is undergoing a transformation, reclaiming its historical position at the heart of global commerce while simultaneously embracing the digital, sustainable and inclusive future. As corporates seek support from their banking partners to navigate this changing landscape, cutting-edge solutions are emerging to cater to their evolving needs.


Trade in Mena has long been synonymous with hydrocarbons, with the region’s vast natural resources underpinning its rapid economic growth for decades. However, recent years have seen a significant shift in the trade landscape, as governments embark on ambitious economic diversification initiatives to spur the development of new industries, such as technology, manufacturing, and renewable energy.

This transformation is driving a wave of innovation and entrepreneurship, as businesses across the region look to capitalise on emerging opportunities and adapt to the changing demands of global markets.

In the UAE, for example, non-oil trade reached an all-time high of AED2.2tn (US$608.1bn) in 2022, a 17% increase on 2021, as the country’s efforts to reduce its reliance on oil and expand its network of trading partners continue to bear fruit. Meanwhile, since the implementation of Saudi Arabia’s Vision 2030, foreign direct investment inflows have jumped by 331%, while the number of manufacturing facilities in the country has increased by 38%. And in North Africa, vast solar and wind farms are proliferating, with Egypt setting its sights on becoming a global and regional powerhouse for green hydrogen production, storage and export.

This shift towards economic diversification has been accompanied by the opening of new trade routes, both within the region and with the rest of the world. As global trade patterns continue to shift, Mena is re-emerging as a critical link between east and west, allowing it to capitalise on the growth of emerging markets, while also maintaining strong ties with traditional partners in Europe and North America.

“Despite a challenging global economic backdrop, the trade landscape in Mena is more dynamic and interconnected than ever before, driving innovation across a range of industries and creating new opportunities for value creation,” says Anirudha Panse, managing director and head of global transaction banking trade finance product innovation at FAB. “We are seeing our clients seek to capitalise on these trends by exploring new markets, diversifying their supply chains, and adopting new technologies. However, with these opportunities come new challenges, and in order to succeed in this rapidly evolving landscape, corporates need to be agile, innovative, and forward-thinking.”


Growing sophistication in trade finance

As the shape of Mena’s trade evolves, so too does the finance that supports it. Long dominated by traditional documentary trade products, demand is now growing among the region’s increasingly globally integrated corporates for more flexible and customised financing solutions that can meet their specific needs. At the same time, the current macroeconomic environment is driving corporates to seek out new sources of working capital, says Hicham El Khaoudy, managing director and head of global transaction banking international at FAB.

“There is a growing interest in trade finance solutions from clients who were not previously engaged in this area,” he says. “The more sophisticated solutions such as receivables and payables finance have now become commonplace, and it is the clients themselves who are initiating these conversations. They’re now asking us for the more complex open account products that can enable them to achieve their strategic objectives.”

“We’re at the forefront of a real revolution,” adds José Antonio López-Mateos Payno, managing director and head of global transaction banking corporate product sales, Abu Dhabi and Al Ain at FAB. “Up until recently, this was largely a traditional trade-focused space. We’re seeing that move now towards comprehensive trade solutions for payables and receivables, as well as bespoke, non-debt solutions to optimise balance sheets. These products include inventory financing, delivered by FAB to its local and international clients, but also increasingly include digitally delivered solutions.”

Once seen as a laggard in digital adoption, the Mena region is fast leapfrogging progress in other parts of the world, as governments take proactive steps to transition towards a more digitalised economy. In 2021, the Abu Dhabi Global Market became one of the world’s first jurisdictions to enact legislation to enable the use of electronic documents in trade, while in the same year, UAE Trade Connect, a blockchain-based digital trade platform, went live with a consortium of top banks in the region, among them FAB.

“There is enormous interest in the region among fintechs, and as a bank we are sourcing and applying the best in fintech innovation to enhance our trade finance capabilities,” says Panse, pointing to the bank’s collaborations with blockchain-based solutions LiquidX and Komgo. “In 2021, FAB became the first bank in the region to introduce a completely automated supply chain finance solution to its clients using an online platform. With the proliferation of digital tools, trade finance transactions can now be processed faster and more efficiently,” he says.


Taking ESG seriously

Another major driver of the trade transformation in Mena is the growing focus on ESG. Recognising that these factors are not only important for the environment and society but also essential for long-term economic success, governments, businesses, and investors alike are transitioning towards a more sustainable and inclusive economic model, a trend that is being accelerated by the region’s hosting of the upcoming Cop28 climate conference in the UAE, following on from Egypt’s successful hosting of Cop27 in Sharm el-Sheikh.

As corporates increasingly prioritise ESG factors in their decision-making, they are looking for banking partners who share their commitment to sustainability and can support them to achieve their objectives. For FAB, which has already committed to facilitating US$75bn of sustainable projects by 2030, this enables funds to be deployed to finance clients’ supply chains, reduce their carbon footprint, and access new markets.

“We see clients actively seeking ESG-compliant solutions, with a view to improving the sustainability of their supply chains,” says López-Mateos Payno, adding that the bank is rolling out sustainable supply chain finance products across its footprint as part of its growing portfolio of ESG-linked products and services.

As supply chain finance programmes become commonplace, a growing number of SMEs in region are being supported to access global value chains and participate in the international market – a trend that FAB aims to support further with a focus on deep-tier financing.

“Clients are really rethinking the way they do business, and are looking for options that go beyond their immediate commercial relationships. Currently in the region, with FAB’s comprehensive ESG-linked products and services we are actively engaging with the wider customer communities on a solution-driven approach,” says Panse. “To meet this need, we are bringing to the fore solutions that support them in shoring up the long tail of their supply chains, which also has the result of creating greater inclusion for the burgeoning SME sector in the trade ecosystem. This not only bolsters the region’s overall trade capabilities but also contributes to the diversification of its economies.”


Creating the right conditions for growth

As economic, geopolitical and technological factors continue to transform Mena’s trade landscape, the importance of trade finance in facilitating cross-border transactions, mitigating risks, supporting SMEs and promoting financial inclusion is only set to increase.

“Financial institutions need to step up and innovate to meet the evolving needs of businesses and individuals,” says Mohamed Al Ali, managing director and head of global transaction banking corporate product sales, Dubai and Northern Emirates at FAB. “FAB is committed to instilling confidence among our clients. Through advisory on risk mitigation measures and credit enhancement techniques to support their trade finance transactions, we are empowering corporates to succeed in this fast-changing environment.”

Mena has a rich and storied heritage of trade, dating back to ancient times when merchants would travel long distances to exchange goods and ideas. Thanks to the region’s continued progress on modernisation, sustainability, digitisation and economic diversification, this heritage is now coming full circle, placing Mena squarely at the heart of global commerce. The future of trade in the Mena region is bright, and those who embrace the opportunities presented by this transformation are sure to prosper.