Unveiling the Mystery: What You Need to Know About Burundi Eco-TDB, the Financial Institution Flying Under the Radar

The Common Market for Eastern and Southern Africa (COMESA) has established several entities including a financial institution: lTrade and Development Bank (TDB). It is considered the financial arm of COMESA. In November 2019, a reporter from a Burundian newspaper managed to enter the grounds of the bank’s former head office to find out more about the operation of this rather unusual financial institution. Narrative.

The Trade and Development Bank (TDB), formerly known as PTA Bank, is a trade and development financial institution in Africa. Anyone who took the Prince Louis Rwagosore road (downtown section of the INSS) certainly heard the passengers on the buses telling the driver to drop them off at the ZEP. As if that was their destination. In fact, this is not true. What is the purpose of this completely renovated building, part of the ground floor of which also houses the headquarters of a telecommunications company and its digital financial services subsidiary? What is the context of its operation? For what purpose? Burundi Eco went in search of answers.

The absence of movement inside the building or the queues in front of the ticket counters piques our curiosity. That day, there was no one at the reception, nor the receptionist who was absent for a while. In other commercial banks, we are used to the influx of customers so much that the banks find it difficult to reduce the queues in front of the counters. Upon arrival, the receptionist refused our request for information about the operation of the famous ZEP bank which has also changed its name. We only received a fact sheet of brief information about the bank.

A constantly changing regional integration programme

The Eastern and Southern African States Preferential Trade Zone (ZEP) was created in 1981. It was within the framework of the Lagos Plan of Action and the Final Act adopted by the Organization of African Unity (OAU), the current African Union. The Parents and Teachers Association was transformed into COMESA in 1994. It was established with the aim of stimulating a larger market, sharing the common heritage and destiny of the region as well as enabling social and economic cooperation. In 1985 the ZEP bank was created.

Among the main objectives of the PTA bank is the promotion and development of infrastructure, exports and businesses in member states. It also aims to accelerate the development and deepening of financial and capital markets in member states.

From PTA Bank to Trade and Development Bank

In 2017, the Preferred Trade Area Bank (PTA Bank) or PTA Bank changed its name and became the Trade and Development Bank of Eastern and Southern Africa. This was to attract more investment. It thus becomes a treaty-based multilateral development financial institution, with assets exceeding USD 7 billion in 2021.

TDB’s mandate is to finance and foster trade, regional economic integration and sustainable development through trade finance, project and infrastructure financing and asset management. TDB’s head office is located in Burundi and Mauritius with regional offices in Kenya, Zimbabwe and Ethiopia.

TDB Shareholders

TDB is one of the COMESA institutions whose shareholding is open to COMESA member states and non-member countries. The Bank counts among its members 22 Member States mainly from COMESA, EAC and SADC, two non-regional members, namely Belarus and China. In 2021, the bank has 41 sovereign and institutional shareholders.

These include, among others: the African Development Bank (AfDB), the Arab Bank for Economic Development in Africa (BADEA), Banco Nacional de Investimento (Mozambique), insurance and reinsurance companies, defense organizations as well as Fund’ r Organization. Petroleum Producing Countries for International Development (OFID).

What about ZEP bank achievements?

In June 2004, the heads of state of the COMESA member countries recommended that the PTA headquarters be returned to Bujumbura. Twelve years later (2016), the government of Burundi signed an agreement with representatives of the PTA Bank for the effective implementation of this recommendation. ZEP bank moved its headquarters to Nairobi following the political crisis that shook Burundi since 1993. The executives of this organization feared for their safety.

The presence of the PTA Bank in Burundi was not without effect. One of the Bank’s major achievements was the financing of the “Burundi Backbone System (BBS)” project. We are talking about a credit budget that hovers around 13 million USD for the installation of the fiber optic network on a national scale. The bank was also involved in the construction of some companies established in Burundi, especially the factory de Mwaro (Prothem) as well as the renovation and / or construction of tourism infrastructure such as hotels.

TDB interventions outside Burundi

On the continent and in the sub-region, the TDB supported the development of the industrial fabric by building sugar factories and agri-food processing plants, promoting air transport and building roads. For example, we would cite the Tanganda Tea Company in Zimbabwe, the Zambezi Portland Cement plant in Zambia and the hydroelectric power station built by Hydromax Ltd in Uganda. In Rwanda, the TDB granted a loan of USD 60 million to the airline Rwandair for the purchase of aircraft (Airbus A330-200 and A 330-300) and the expansion of its air transport activities. He also lent an amount of 10 million dollars to the Bank of Kigali and 93 million to the CIMERWA cement factory.

You will understand that the Trade and Development Bank (TDB) is not a commercial bank where an individual can have a current account and carry out banking transactions there. Rather, it is a financial institution that allows COMESA Member States to carry out large-scale projects such as the construction of socio-economic infrastructure and the development of the private sector through long-term credits. The bank’s main areas of intervention include: transport and logistics, the financial sector, energy, education, telecommunications, mining, industrialisation, etc.