African Development Bank joins WTO and other MDBs to support trade finance amid COVID-19 crisis

Although we are headquartered in Washington D.C. USA, our reporters and editors are working around the globe to cover what you care about. Become our exclusive member and help us keep our quality news free and available for all.

The African Development Bank Group has joined the World Trade Organization and other multilateral development banks to reduce trade finance gaps that emerge as a result of the COVID-19 pandemic.

In a joint press release issued on July 1, 2020, the institutions said they would prioritize their support to areas in the world where such support is needed most, particularly the poorest countries.

Since the beginning of the COVID-19 outbreak, multilateral development banks have stepped up their trade finance programs to support essential imports and key exports, as international correspondent banks have cut lending in many countries.

In addition to the ongoing shocks to supply and demand, international trade has
been affected by a reduction in the supply of trade finance. Risk perceptions about non-payment in international trade are at the highest levels in a decade and banks are increasingly reluctant to take on payment risks in many countries where economic conditions are deteriorating.

Facilitating trade in medical supplies has been a significant part of these support packages. With the approval of its $10 billion Covid-19 Rapid Response Facility (CRF) in April 2020, the African Development Bank is providing up to $1 billion in trade finance liquidity and risk mitigation support to local banks in all 54 eligible African member countries.

More support will almost certainly be necessary in the weeks and months ahead, as the steep decline in the real economy starts to impact the financial system through loan defaults and corporate bankruptcies.

Many developing countries were experiencing significant trade finance shortages even before the COVID-19 crisis; now they face even tighter access to trade credit.

A further decline in trade finance supply would, in the short term, make it harder for imports of food and medical equipment to reach economies where they are urgently needed. In the medium-term, it would impede the ability of trade to help drive economic recovery.

Insufficient trade finance threatens to compromise otherwise viable trade transactions, disproportionately affecting micro, small, and medium-sized enterprises (MSMEs), which account for the bulk of employment in Africa.

“We share the concerns being expressed in markets, and will work within our respective remits to make trade finance available through this difficult period, just as we did during the global financial crisis of 2008-10,” the joint statement said.

Read full article

TODAY NEWS AFRICA
TODAY NEWS AFRICAhttps://todaynewsafrica.com
TODAY NEWS AFRICA is registered and headquartered in Washington, District of Columbia, United States of America. Our publication is widely read, respected and influential. By providing daily answers to questions our readers have about the people, the businesses and the continent of Africa, we are reaching a diverse and wide audience from around the world. Our readers, many of them world leaders, trust us because we are independent and truthful. Our advertisers understand the difference between news, views and ads. Contact us: contactus@todaynewsafrica.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Trending Now

MOST POPULAR

U.S. police used excessive force against Black Lives Matter protesters at least 125 times in 10 days, Amnesty International says in new findings

Amnesty International on Tuesday released a new report documenting mass violations by the police in the United States against Black Lives...

South Africa’s grocery retailer Shoprite announces plans to exit Nigeria amid economic crisis

South Africa's grocery retailer Shoprite on Monday announced plans to exit Nigeria amid an economic crisis caused by a shrinking middle...

With 17.5 million infections and 680,000 deaths, and with no cure or vaccine, WHO says beating COVID-19 still revolves around social distancing, hand hygiene and respiratory etiquette

With 17.5 million people infected and 680,000 deaths, and with no cure or vaccine, the World Health Organization (WHO) said on...

South African President outraged, says profiting from coronavirus pandemic “is like a pack of hyenas circling wounded prey”

The South African President Cyril Ramaphosa expressed outrage on Monday over those who attempt to profit from the ravaging coronavirus pandemic,...

South Africa presidency says deputy president David Mabuza is alive and well amid death rumors

The South African presidency said on Sunday deputy president David Mabuza is alive and well amid death rumors.
- Advertisement -

LATEST STORIES

U.S. admits killing innocent civilians in Somalia but fails to compensate families of the victims, enraging Amnesty International

The United States on Tuesday admitted killing innocent civilians in Somalia but has failed to compensate the families of the victims,...

U.S. police used excessive force against Black Lives Matter protesters at least 125 times in 10 days, Amnesty International says in new findings

Amnesty International on Tuesday released a new report documenting mass violations by the police in the United States against Black Lives...

WHO says developing countries would have access to successful coronavirus vaccines if more nations support COVAX financing initiative

The World Health Organization (WHO) said on Thursday that developing countries, including many in Africa, would have access to successful coronavirus...

Tears as South Africa bids farewell to Mandela’s pal, freedom icon and last remaining Rivonia trialist Isithwalandwe Seaparankoe Andrew Mokete Mlangeni

President Cyril Ramaphosa on Wednesday remembered South Africa's freedom icon Isithwalandwe Seaparankoe Andrew Mokete Mlangeni with powerful words.

IMF approves disbursement of additional $171.9 million to Madagascar to respond to COVID-19

The International Monetary Fund (IMF) on Thursday approved the disbursement of an additional $171.9 million to Madagascar to respond to COVID-19...

[/read_more]

Read full article

error: Alert: Content is protected !!
Share
Tweet
Share
Reddit
WhatsApp