Tanzania’s $10 Million Trade Guarantee Set to Support SMEs and Regional Commerce

The facility is expected to benefit the private sector and strengthen businesses’ participation in regional and international markets, with intra-African trade forming an important part of its purpose.

Tanzanian businesses could gain stronger support for import transactions through a $10 million trade finance guarantee facility signed by the African Development Bank Group and Exim Bank Tanzania Limited on 28 September. The agreement, signed in Dar es Salaam, will support small and medium-sized enterprises and local companies operating in the import sector, giving Exim Bank additional capacity to facilitate trade. The facility is expected to benefit the private sector and strengthen businesses' participation in regional and international markets, with intra-African trade forming an important part of its purpose.

Guarantee coverage helps banks manage payment risks

Under the facility, the African Development Bank Group will provide confirming banks with guarantees covering up to 100% of non-payment risks arising from letters of credit and similar trade finance instruments issued by Exim Bank Tanzania. These instruments help businesses arrange payments for cross-border transactions, making the banks' willingness to support them important to trade activity. The Bank's Transaction Guarantee is an unfunded instrument that provides this risk protection for eligible transactions issued by Africa-based banks, helping participating institutions manage their exposure.

Partnership strengthens Exim Bank's support for businesses

Mary Monyau, the African Development Bank Group's Country Manager for Tanzania, highlighted the facility's importance in addressing the country's trade finance needs and linked it to broader efforts to reduce reliance on imports in agriculture, manufacturing and energy. She said the agreement reflects the Bank's Cardinal Points on managing risk, mobilising capital and unlocking SME financing, connecting support for individual businesses with stronger African regional integration and a greater role for the continent in global markets.

Exim Bank Tanzania's Chief Financial Officer, Shani Kinswaga, described the partnership as an investment in the financial infrastructure needed to support Tanzania's growing trade ambitions. The additional capacity and risk support will help Exim Bank deepen its trade finance business and pursue viable opportunities with greater confidence, maintaining disciplined risk management and sound credit standards. For Tanzanian businesses, the partnership is expected to provide stronger backing for participation in regional and international markets through a bank better equipped to support their transactions.

Trade support connects with Tanzania's development plans

The facility will advance intra-African trade and contribute directly to the objectives of the African Continental Free Trade Area, linking Tanzania's business opportunities with the wider push for regional commerce. Monyau connected the agreement to Tanzania Vision 2050, which seeks to build an inclusive, climate-resilient, high-income and globally competitive economy by 2050. Its support for private enterprise forms part of that development direction, placing access to trade finance alongside the country's longer-term economic ambitions.

The agreement advances the African Development Bank Group's Tanzania Country Strategy Paper for 2026–2031, which prioritises improving the private sector business environment to support job creation. Its immediate focus is on the payment risks and financing capacity involved in trade transactions, with SMEs and local import businesses identified as beneficiaries. By strengthening Exim Bank's ability to support viable trade, the facility connects practical banking support with Tanzania's efforts to expand private sector activity and regional economic participation.