Britain Agrees $100 Million Trade Finance Deal to Enhance Africa’s Food Security

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British International Investment, a development lender, announced on Monday a $100 million finance facility in collaboration with the Eastern and Southern African Trade and Development Bank (TDB) aimed at bolstering trade finance, agriculture, and food security in the region.

The financing is intended to support trade activities, including the import and export of goods, within a continent where many African economies are burdened by debt, currency depreciation, rising debt levels, inflation, and challenges exacerbated by climate change.

The provision of additional capital for trade finance is crucial as numerous international lenders have withdrawn from offering such services, resulting in an estimated finance gap of up to $120 billion annually, according to research by the African Development Bank.

Andrew Mitchell, Britain’s Minister for Development and Africa, highlighted that this investment underscores the UK government’s commitment to supporting economic and agricultural development across Africa.

British International Investment, with investments in over 1,470 businesses across 65 countries and total assets of £8.1 billion, stated that between 2022 and 2026, at least 30% of its total new commitments by value will be allocated to climate finance initiatives.

This financing agreement with TDB marks the fourth collaboration between the two entities and is expected to assist the bank in addressing supply chain disruptions and foreign exchange shortages, according to Admassu Tadesse, TDB Group President and Managing Director. Tadesse also emphasized the critical role the group plays, particularly in ensuring the security of essential commodities supply in vital sectors such as agriculture and healthcare, often operating counter-cyclically.