The International Islamic Trade Finance Corporation (ITFC) signed a $200 million syndicated Murabaha financing agreement with the African Export-Import Bank (Afreximbank) to help the agricultural sector in Africa.
The International Islamic Trade Finance Corporation is a member of the Islamic Development Bank (IsDB) Group while Afreximbank is a multilateral financial institution established by African governments and institutional investors.
The facility aims at helping African countries address some of the economic impacts of the pandemic. This syndication is supported by financial institutions and some of the partners who allocated resources to the agricultural sector in Africa.
The agreement which is in line with ITFC’s ongoing commitment in Africa will fund the export of soft commodities such as cocoa, sesame seeds, raw cashew nuts and maize.
Agriculture being Africa’s continent largest employer and a key driver of SME development, the funds will provide critical support for the sector for eleven countries in Sub-saharan Africa.
Commenting on the Murabaha financing agreement, ITFC CEO, Eng. Hani Salem Sonbol, 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. 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.”
since ITFC’s inception in 2008, Africa region has been a priority for the corporation for instance in 2019 alone ITFC disbursed $2.38 billion in Africa with its total funding at $15.6 billion.
The funding has helped the Organisation of Islamic Cooperation (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.