Top officials during the signing ceremony.
Abu Dhabi Exports Office (ADEX), the export-financing arm of Abu Dhabi Fund for Development (ADFD), has signed a $30 million (Dhs110.19 million) line-of-credit agreement with the Eastern and Southern African Trade and Development Bank (TDB) to bolster trade between the UAE and the Bank’s Member States.
The first of its kind to be signed by ADEX with a foreign financial institution, the trade finance facility agreement was signed during a virtual ceremony by Saeed Al Dhaheri, Acting Director-General of ADEX, and Admassu Tadesse, TDB Group Managing Director and CEO.
Through the facility, ADEX will provide the line of credit to TDB for the purpose of extending loans to buyers and importers from the Bank’s Member States to purchase goods and services from UAE sources.
“Fulfilling mutual interest through strategic partnerships is key to ADEX’s effort to turn into reality its vision to drive sustainable economic growth at home and abroad,” said Mohamed Saif Al Suwaidi, Director-General of ADFD and Chairman of ADEX’s Export Executive Committee.
“The agreement constitutes an ideal partnership that benefits everyone.” The agreement is in line with the UAE Government’s policy to support and promote trade relationships that equally benefit partner organisations and Emirati exporters, enabling them to expand their businesses, as well as their contribution to economic diversification and sustainable development in the UAE and abroad.
It is also consistent with TDB’s mandate to finance and foster trade, regional economic integration and sustainable development in its Member States.
The partnership will give much-needed support to both exporters and importers at a time when the global economy is facing challenges due to the COVID-19 pandemic.
Al Dhaheri described the agreement as an integral part of ADEX’s core strategy to help national companies expand their footprint and support the UAE’s economic diversification effort.
He called it an ideal partnership that helps the export-financing entity to directly drive growth for the national export economy, while enabling a broader range of importers to obtain credit on more competitive terms. “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.”
“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. Thus, the agreement is a win-win for both parties,” Al Dhaheri said.
Admassu Tadesse, TDB Group Managing Director and CEO, pointed out that that trade between the UAE and Africa has doubled over the past five years, while it has grown about 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.”
He expressed hope that the agreement will help the beneficiaries unlock their potential by creating more opportunities for them, and that in turn, they will contribute more substantially to the common endeavour of ADEX and TDB towards sustainable development.
Michael Awori, TDB Deputy CEO and COO, said, “through its trade finance operations, among other impacts, TDB plays a key role in the importation of strategic commodities that are essential to energy and food security, and to support industrialisation and higher productivity via the imports of equipment.”
He expressed confidence that the agreement will go a long way to ensure that business between the UAE and Africa continues to flourish, despite the liquidity crunch created by the pandemic, as well as the crisis fuelled by the withdrawal of global banks from Africa following the last financial crisis.
Alongside the Facility, the parties also signed a cooperation agreement to lay further foundations upon which business and trade between the UAE and Africa can be promoted. In that context, TDB and ADEX will explore possibilities to co-finance qualifying transactions and establish additional lines of credit, and encourage the exchange of information regarding relevant parties and possible transactions, which can support the underlying objectives of the agreement.