On May 10, 2014, the President of in Nairobi, Mr. Admassu Tadesse, President and Chief Executive of the Eastern and Southern African Trade and Development Bank (PTA Bank) and Mr. Wang Yongsheng Executive Vice President of China Development Bank (CDB), signed a Framework Agreement to be used to finance small and medium sized enterprises (SMEs) in PTA Bank’s member states for $60 million at the Statehouse in Kenya witnessed by President Uhuru Kenyatta and Chinese Premier Li Keqiang. Recognizing that SMEs are the backbone of development in the region, CDB decided to cooperate on financing such so as to be at the forefront of Africa’s development.
The People’s Republic of China is a Member Country of the Bank, meaning it is a shareholder of the Bank, but no development activities take place in China. Currently, China’s subscribed capital is USD 77 million. As such, the line of credit is significant because it is yet another indication of shareholder confidence in the Bank. This line of credit is the third CDB has provided to PTA Bank. CDB to date has lent 62.9M to PTA Bank.
Based on the principles established at the Forum on China-Africa Cooperation (FOCAC), the Chinese government will promote the development of the region and economic development based on a win-win outcome. Further, FOCAC emphasized that China-Africa cooperation is an optimal partnership that supports South-South cooperation, deepen dialogue, broaden consensus etc. As such, the Chinese government will promote cooperation in economic, trade, financial, agricultural, and other areas that promote economic and development.
There is no doubt that SMEs underpin Africa’s development. As a preferred trade and development Bank in the tripartite, PTA Bank will continue to grow the region’s SMEs and hence promote economic development.