The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) Group, signed a $200m syndicated Murabaha financing agreement with the African Export-Import Bank (Afreximbank), a multilateral financial institution established by African governments and institutional investors.
The syndication, supported by number of partners and financial institutions who allocated resources, is to help African countries address some of the economic impacts of the Coronavirus (COVID-19) pandemic.
The agreement, which is indicative of ITFC’s ongoing commitment to, and trust in Africa, according to a statement, will finance the export of soft commodities like raw cashew nuts, cocoa, sesame seeds and maize.
The financing will also 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.
Commenting on the agreement, Eng. Hani Salem Sonbol, ITFC’s Chief Executive, said: “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,” he stressed.
Sonbol expressed appreciation to “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.”
The Africa region has been a priority for ITFC since its inception in 2008, mandated to answer to the developmental and economic requirements of the member countries in the continent.
For this reason, the statement stressed, ITFC disbursed US$2.38bn in Africa in 2019 alone, taking the total since 2008 to US$15.6bn, 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 be recalled that ITFC first partnered Afreximbank in 2017 with the signing of a US$100m agreement with the aim of facilitating and financing exports amongst African countries and between Africa and the rest of the world.