The Abu Dhabi Exports Office (ADEX), the exports finance arm of Abu Dhabi Fund for Development (ADFD), has signed a $30 million trade finance agreement with the Eastern and Southern African Trade and Development Bank (TDB) to further boost trade between the UAE and TDB’s member states.
According to reports, as part of the agreement, ADEX will provide loans through the TDB to buyers and importers from the bank’s member states for the purchase of products and services from the UAE.
The agreement is ADEX’s first of its kind with a foreign financial institution, and it is expected to help both exporters and importers as the global economy grapples with the coronavirus pandemic.
Mr. Saeed Al Dhaheri, Acting Director-General ADEX remarked that “this is not only a difficult time for UAE exporters, but it is also a challenging time for their overseas buyers, particularly smaller importers who cannot access any direct credit facilities from export-financing institutions.”
ADEX was set up last year by ADFD to help drive international trade by offering loans and guarantees to foreign buyers seeking to import goods and services from the UAE.
“Both are dealing with liquidity and cash flow issues, delayed supplier payments, and limited access to financing. Through our partnership with TDB, we intend to provide a solution to these challenges that enables both the exporter and importer to fund mutually beneficial transactions quickly and easily,” Mr. Al Dhaheri added.
ADEX received $200 million from the ADFD earlier this year to help diversify the economy and improve exports.
From Egypt in the north to Zimbabwe in the south, the trade and development agency (TDA) is made up of 22 member countries from Eastern and Southern Africa. The Africa Reinsurance Corporation, the African Development Bank, and the OPEC Fund for Development are among its multilateral representatives.
TDB Group Managing Director and Chief Executive Officer Mr. Admassu Tadesse stated that trade between the UAE and Africa has doubled in the last five years, and has increased eight-fold in the past 15 years.
“The statistics signal a growing interest of businesses in the UAE and our region to build stronger trade relations.”
Both institutions have signed a partnership agreement to facilitate trade between the UAE and Africa. ADEX and TDB will look into the possibility of co-financing qualifying transactions and opening new lines of credit.
During the coronavirus-induced slowdown, the UAE, the second-largest Arab economy, has taken a range of measures to assist local exporters.
Last month, Etihad Credit Insurance (ECI), the UAE’s federal export credit agency, signed a deal with Emirates NBD to increase exporters’ access to trade finance. In March, ECI signed an agreement with the African Trade Insurance Agency to strengthen insurance and financing capabilities to help the UAE and Africa develop their trade.