How is Aid for Trade Financed?

The majority of funding provided for Aid for Trade (AfT) implementation comes from bilateral and multilateral donors as part of their overall response to national poverty reduction strategies, and is delivered through standard ODA channels.

Nevertheless, as AfT evolves, donors and development partners are increasingly developing financing instruments, especially trust funds, that can support specific AfT priorities - such as sanitary and phytosanitary measures, and trade facilitation - and/or specific geographic areas, such as Least Developed Countries. Institutions which are able to provide targeted support to AfT implementation through dedicated financing instruments include among others, the Enhanced Integrated Framework for Least Developed Countries, the Standards and Trade Development Facility, the World Bank Trade Facilitation Facility and Multi-donor Trust Fund for Trade and Development.Developing countries also allocate AfT finance through the national budget. Another potential instrument for AfT financing is a trade Sector Wide Approach (SWAp), given the cross-cutting nature of trade and the consequent need to engage with a wide and diverse range of stakeholders in the implementation of trade development activities.

All these different channels for AfT financing do not exclude but rather complement one another. They can be accessed individually, independently, at different times and in no pre-established order.

The interesting feature of AfT finance is that, given the cross-cutting nature of trade, it prefers pool funding type of financing arrangements.

This makes AfT finance totally coherent with the GM’s Integrated Financing Strategy (IFS) approach and with the Integrated Investment Frameworks for SLM.  The IFS and the IIF are therefore the natural settings for engaging trade actors and for mobilising AfT finance to strengthen SLM as the basis for sustainable production in agriculture.

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For more information

Ms Eleonora Canigiani
Trade & Markets Strategy Officer
Tel.: +39 06 5459 2734
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Ms Susan Bingi
Trade and SLM Advisor
Tel: +256 414 314283
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Mr Salif Touré
Trade and SLM Advisor
Tel.: +223 20 22 34 65
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