The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) Group, has signed a US$200 million syndicated Murabaha financing agreement with African Export-Import Bank (Afreximbank) to finance projects aimed at addressing the impacts of Covid-19 on the economics of African countries.
The agreement signed with the multilateral financial institution established by African governments and institutional investors are particularly to provide syndicate support by a number of partners and financial institutions who allocated resources to the agriculture sector in Africa.
According to a statement obtained by BusinessDay, on Tuesday, the signing of the agreement is indicative of ITFC’s ongoing commitment and trust it has in Africa.
The agreement is also designed to provide finance for the export of soft commodities, such as raw cashew nuts, cocoa, sesame seeds, and maize, as well as provide critical support for the agriculture sector (the continent’s largest employer and a key driver of SME development) of 11 countries in sub-Saharan Africa.
“The financing of agricultural exports during these extremely challenging economic conditions will provide a lifeline to exporters affected by the impact that COVID-19 has had on the price of commodities.
“Hundreds of millions of people in Africa rely on agriculture for employment and many countries’ food security rests on the smooth and affordable import and export of foodstuffs. We thank our financial partners for joining ITFC in this syndication, particularly for their unabated support in this turbulent time, to allocate resources for Africa. This new partnership with Afreximbank will go some way to supporting businesses and ordinary people as we navigate the coronavirus pandemic”, Hani Salem Sonbol, ITFC, Chief Executive Officer (CEO), stated.
Hani said that the Africa region has been a priority for ITFC since its inception in 2008, as the group has the mandated to answer to the developmental and economic requirements of the member countries in the continent.
For this reason, he pointed out that the group had disbursed US$2.38 billion in Africa in 2019 alone, making it a total US$15.6 billion disbursed so far, as a way of helping OIC member countries in the region to achieve sustained economic growth, job creation and value creation in the key export sectors of agriculture, energy, and manufacturing.
“It is worth mentioning that ITFC first partnered with Afreximbank in 2017 with the signing of a US$100 million agreement with the aim of facilitating and financing exports amongst African countries and between Africa and the rest of the world.
“Afreximbank is also a key partner in the Arab Africa Trade Bridges (AATB) Program initiated by ITFC, a program with a mandate of enhancing economic integration between the Africa and Arab regions and strengthening SME export development across key sectors”, he added.
