PAMA Commends AfDB’s $50m Trade Support to Cooperative Rural Development Bank

• Commends NCGC launch, calls for broader industrial credit across Africa

Pan-African Manufacturers Association (PAMA) has commended the Board of Directors of the African Development Bank Group (AfDB) for approving a $50 million Trade Finance Transaction Guarantee Facility to Cooperative Rural Development Bank Plc (CRDB Bank) in Tanzania.

The facility, according to PAMA, will enable the Bank to provide a guarantee of up to 100% to confirming banks for the non-payment risk arising from the confirmation of Letters of Credit and similar trade finance instruments issued by CRDB Bank Plc in Tanzania.

The facility is said to provide much-needed import trade finance requirements to Small and Medium Sized Enterprises (SMEs) and local corporates in Tanzania, as well as support intra-Africa trade, thus directly contributing to the successful implementation of the African Continental Free Trade Area (AfCFTA) agenda.

African Development Bank Head of Trade Finance, Lamin Drammeh, noted that following the approval, supporting trade in Africa is a key priority at the African Development Bank.

“Trade finance is essential for Africa’s economic development, facilitating both domestic and international trade, boosting economic growth and promoting regional integration,” it added.

PAMA believes the facility is a transformative step that will address one of the biggest constraints faced by SMEs access to affordable and reliable trade finance in Tanzania.

The guarantee, it added will not only empower Tanzanian SMEs and corporates to participate more actively in regional trade, but also sends a powerful signal about the critical role targeted trade finance support can play in accelerating Africa’s industrialisation.

In a related development, PAMA lauded the commencement of Nigeria’s National Credit Guarantee Company (NCGC), describing it as a bold intervention aimed at unlocking access to finance for Nigerian businesses, particularly Micro, Small, and Medium-Sized Enterprises (MSMEs).

Speaking at the event, PAMA Co-Secretary General, Segun Ajayi-Kadir, mni, who served as a panellist, highlighted that the most pressing challenge facing the manufacturing sector remains credit and accessibility and affordability.

Ajayi-Kadir urged the NCGC to prioritise credit affordability, noting that prevailing high interest rates discourage many industries, particularly Small and Medium Industries (SMIs), from accessing the funds needed for industrial investment.

PAMA Co-Secretary General expressed the optimism that the establishment of the NCGC would help shift the dynamics by de-risking the sector and bridging critical credit gaps, thereby paving the way for long-term financing for manufacturers.

PAMA believes that replicating these financing models across the continent will accelerate Africa’s transformation into a competitive, industrialised economy, where SMEs, often described as the “engine of growth”, can thrive and scale.

Therefore, similar investment financing interventions should be extended to other African countries, particularly those with high Small and Medium Industry, (SMI) activities, so that no part of the continent is left behind in the march toward economic integration and shared prosperity.