AFDB Headquarters

Reuters

The African Development Bank (AfDB) is looking into ways of providing trade finance to firms doing business with Europe, where an interbank credit squeeze has driven up the cost of funding, chief economist Mthuli Ncube said on Tuesday.

In ominous signs for Africa of a repeat of one aspect of the 2008 credit crisis, Ncube said some European banks were no longer willing to lend to firms trading with the poorest continent, threatening its economic growth.
"With the crunch in Europe the cost is creeping up and the willingness of the banks to extend the credit in the first place is also an issue," he told Reuters in an interview.

"Trade finance is an area where we will intervene more visibly. It's something that we have not done a lot in the past, but that is going to change."