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The African Development Bank (AfDB) and Bank of Africa Tanzania (BOAT) have signed a $7.5 million Trade Finance Transaction Guarantee Facility aimed at enhancing access to trade finance in Tanzania, particularly for small and medium-sized enterprises (SMEs) and local corporates.
Under the agreement, the African Development Bank will provide up to 100% guarantee coverage to confirming banks for trade finance instruments—including letters of credit—issued by Bank of Africa Tanzania. The guarantee aims to mitigate non-payment risks and improve the bank’s ability to engage with international confirming banks, thereby expanding Tanzania’s trade capacity across key sectors such as agriculture, manufacturing, energy, and general commerce.
The signing event took place on March 10, 2025, in Dar es Salaam, and marks a strategic move to strengthen Tanzania’s position in regional and international trade, in alignment with the goals of the African Continental Free Trade Area (AfCFTA).
“This facility will support trade by enabling BOAT to play a more strategic role in the regional and international market,” said Patricia Laverley, AfDB’s Country Manager for Tanzania. “Given the country’s significant import requirements, this partnership will be instrumental in supporting priority sectors and boosting economic resilience.”
Strengthening Trade, Empowering SMEs
Representing BOAT, Deputy Managing Director Hamza Cherkaoui praised the partnership, describing it as a catalyst for expanding the bank’s trade finance capabilities.
“This partnership strengthens our ability to support businesses across various sectors by providing seamless trade finance solutions, expanding our confirmation network, and enabling access to top-tier confirming banks,” he stated.
The facility is designed to enhance financial inclusion by improving SMEs’ access to trade finance, which has historically been limited due to perceived risk and limited collateral. It also complements Tanzania’s Country Strategy Paper 2021–2025, which emphasizes private sector development and job creation.
Supporting National and Continental Economic Agendas
This trade finance facility is aligned with several strategic priorities of both the African Development Bank and the Tanzanian government:
- Boosting Intra-African Trade under the AfCFTA framework.
- Supporting Vision 2025 Tanzania, which aims to build a globally competitive and resilient economy.
- Advancing regional integration, industrialization, and food security, which are core to the AfDB’s “High 5” development priorities.
Milestone in AfDB-Tanzania Private Sector Engagement
The agreement represents a significant milestone in the AfDB’s engagement with Tanzania’s private sector, reinforcing its commitment to deepening financial systems, promoting economic diversification, and accelerating sustainable growth across Africa.
By backing local financial institutions like BOAT, the African Development Bank is fostering trade-enabling ecosystems that unlock access to international markets, build credit confidence, and strengthen economic competitiveness.
Strong foundation for inclusive, trade-driven growth
With this $7.5 million trade finance guarantee, the AfDB and BOAT are laying a strong foundation for inclusive, trade-driven growth in Tanzania. The facility is expected to unlock new opportunities for SMEs, catalyze investment, and contribute meaningfully to Africa’s broader development age
