At a time when the lack of financing is one of the main obstacles to the development of several sectors in Africa, the Trade and Development Bank of Eastern and Southern Africa (TDB) has concluded a €240 million credit facility with the Japan International Cooperation Agency (JICA), Sumitomo Mitsui Banking Corporation (SMBC) and Citibank.
The €240 million facility agreement was signed recently at the Eastern and Southern African Trade and Development Bank (TDB) operations centre in Nairobi, Kenya. The credit facility is being set up by the Japan International Cooperation Agency (JICA), Sumitomo Mitsui Banking Corporation (SMBC) of Japan and Citibank based in New York in the United States of America.
The facility is designed to support micro, small and medium-sized enterprises (MSMEs) in the Least Developed Countries (LDCs) of Eastern and Southern Africa. There are a number of LDCs in this part of Africa. These include Somalia, which is trying to rebuild its economy after years of civil war, Djibouti, Eritrea, Malawi and the Comoros, an island country in the Indian Ocean off the coast of East Africa.
Financing food security
With the financing mobilised by JICA, SMBC and Citibank, TDB intends to encourage “cross-border cooperation, taking advantage of innovative financial solutions, in order to strengthen the economic resilience of the private sector and promote inclusive and sustainable growth”, explains its chairman Admassu Tadesse. The Mauritius-based bank hopes that the credit facility will enable MSMEs to invest in growth, innovation and job creation.
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Among the priority sectors is agriculture, and in particular “the expansion of agribusiness and agricultural innovation through innovative practices, technologies and supply chain improvements”, says TDB. This sector is facing drought. In the Horn of Africa, the Intergovernmental Authority on Development (IGAD) estimates that drought threatens the food security of 20 million people, mainly in Ethiopia, Somalia and northern Kenya.
Following on from these investments in innovation for more resilient agriculture, TDB will provide credit to MSMEs to support “industrial development, including manufacturing, as well as infrastructure development to catalyse a favourable business environment”.
Jean Marie Takouleu
