Discover how DP World and Nedbank are transforming trade finance in Africa to support small businesses and enhance regional economic growth.
DP World, a global leader in port and logistics, alongside Nedbank, a major financial institution based in Johannesburg, have embarked on a strategic partnership aimed at reshaping trade finance in sub-Saharan Africa. This collaboration seeks to address the persistent challenges of working capital among small businesses in the region.
Enhancing Regional Access
The partnership aims to ease capital constraints for suppliers and provide a “more economical financing option” than existing market solutions, the companies said in a statement.
Under the new agreement, DP World has launched a groundbreaking supply chain finance program within its platform, with Nedbank providing the financial muscle. This program grants DP World’s suppliers in sub-Saharan Africa access to early payments for approved receivables, thereby easing cash flow issues and enabling smoother business operations.
Tackling the Trade Financing Gap
The initiative comes at a crucial time, as Africa faces an estimated $80 billion to $120 billion trade financing gap, with expectations of further widening due to increased intra-regional commerce anticipated from the African Continental Free Trade Area. This free-trade zone, projected to be the world’s largest by area once fully operational by 2030, underscores the urgent need for robust trade financing solutions.
According to a 2022 report from the International Trade and Forfaiting Association in Zurich, and KLEOS Advisory, shortfalls in trade financing heavily small and medium-size companies, “which make up around 80% of African traders, and whose banks struggle with regulatory costs to profitably finance their merchant activities.”
Voices from the Industry
Reflecting on the partnership, Anél Bosman, Group Managing Executive at Nedbank CIB, emphasized the strategic alignment, stating, “By combining our expertise in structured finance with DP World’s logistics network, we are well-placed to tackle the region’s trade finance challenges.”
This sentiment was echoed by Mohammed Akoojee, CEO & Managing Director for sub-Saharan Africa at DP World, who noted, “By combining DP World’s logistics capabilities with innovative financial solutions, we are not only enabling our suppliers to thrive but also fostering a more transparent and efficient trade ecosystem.”
Expanding Economic Opportunities
The partnership between Nedbank and DP World is not just about financial transactions; it’s about creating sustainable business ecosystems. This collaboration is poised to significantly boost credit availability, particularly for farmers and small traders, further supported by a risk-sharing agreement between the two entities.
This strategic partnership marks a pivotal development in trade finance for Africa, aiming to empower small to medium-sized enterprises and bolster economic growth across the region. By improving access to financing and mitigating trade-related risks, DP World and Nedbank are setting a precedent for how global logistics and financial services can collaborate to drive economic advancements in emerging markets.
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