By Business Insider Reporter
In a significant move to reinforce Africa’s economic resilience, the Danish government has announced a TSh41 billion (DKK 100 million) allocation to support trade development across the continent.
The funding, revealed by Denmark’s Foreign Affairs Minister Lars Løkke Rasmussen on June 2, aims to counter the adverse effects of the ongoing global trade war on African economies.
Of the total amount, TSh 6 billion (DKK 40 million) is earmarked specifically for East Africa, with the goal of promoting regional trade integration, industrialisation, and export-led growth.
“Africa must be empowered to withstand global shocks and trade pressures. Our support is focused on building long-term economic sovereignty,” Rasmussen said in a statement released from Copenhagen.
The funding will target projects that help curb unfair trade practices such as dumping, where foreign goods are sold below market value—undermining local industries. In response, the support package will promote local manufacturing, value addition and fair competition.
Tanzania is expected to be one of the key beneficiaries, given its central role in East African trade corridors and growing emphasis on industrialisation.
The funding comes at a time when Tanzanian exporters have expressed concern about volatile commodity markets and protectionist policies by major trading partners.
“Access to capital and trade facilitation is crucial for Tanzania to diversify its exports and scale its manufacturing base,” said Dr. Hildebrand Shayo, an economist at the University of Dar es Salaam. “This Danish initiative is a step in the right direction.”
The support also aligns with the goals of the African Continental Free Trade Area (AfCFTA), which aims to deepen intra-African trade and strengthen the continent’s position in global commerce.
By focusing on export capacity building and policy alignment, Denmark’s funding will help African states, including Tanzania, improve competitiveness and reduce dependence on primary commodity exports.
According to the World Bank, Sub-Saharan Africa’s trade-to-GDP ratio has declined from 61% in 2012 to below 50% in 2023, largely due to global protectionism and supply chain disruptions.
Initiatives like Denmark’s could help reverse that trend.
Denmark has long maintained a development partnership with Tanzania, supporting areas such as energy, governance, and green growth.
This latest trade-focused initiative marks a strategic shift toward economic diplomacy and private sector empowerment.
“Denmark’s commitment reflects a modern development approach – one that links aid to trade and mutual prosperity,” said Karen Møller, Director of Global Partnerships at the Danish Ministry of Foreign Affairs.
This funding package is part of Denmark’s 2024 Strategy for Africa, which emphasises stronger political, economic, and climate engagement with the continent. As African countries brace for future economic shocks, Denmark’s support may serve as a model for other development partners seeking more sustainable trade relationships with Africa.
