…as Bank, ICD, offer USD100M Facility for SMEs in Sharia-compliant countries
The International Islamic Trade Finance Corporation (ITFC) and the African Export-Import Bank (Afreximbank) have signed a US$100-Million agreement and a EUR 50-Million Murabaha agreement with the aim of facilitating and financing exports amongst African countries and between Africa and the rest of the world.
While the ITFC is a member of the Islamic Development Bank (IsDB) Group, the Afreximbank is a multilateral financial institution established by African governments and institutional investors.
The agreements were signed by Eng. Hani Salem Sonbol, the CEO of ITFC, and Mr. Amr Kamel, Executive Vice President, Business Development & Corporate Banking of Afreximbank, in a ceremony held during the Afro-Arab Trade Finance Forum, which was organized by the Arab Bank for Economic Development in Africa (BADEA) on 21 December 2017 in Dubai under the Arab Africa Trade Bridges Programmme.
A news report on the deals distributed by Africa Press Organisation (APO) indicated that the facilities were intended to be used to support procurement from suppliers from the member and non-member countries, including local purchase, to promote trade across Africa.
The Chief Executive Officer of ITFC, Eng. Hani Salem Sonbol, was quoted as saying on the occasion that the “partnership comes as part of ITFC’s commitment to support the development of the African member countries’ exports as an important lever toward the sustainable growth, job creation and poverty reduction.”
He pointed out that this partnership will be utilized to finance African OIC member countries under the “Arab-Africa Trade Bridges” Program, a regional trade promotion program that aims at addressing some of the challenges faced in promoting trade between the two regions and supporting South-South cooperation.
Sonbol delivered a keynote speech at the opening session of the Forum that focused on identifying the prospects and opportunities between the Arab countries and Africa, and the best ways to tackle the challenges that hinder the development of the trade flows in these countries.
The Executive Vice President at Afreximbank, Mr. Amr Kamel, in his speech at the ceremony, stated that Afreximbank saw the Murabaha partnership agreement as a stepping stone towards greater collaboration in pursuit of the Bank’s shared vision with ITFC.
He said that “ITFC has demonstrated that it stands shoulder to shoulder with the African Export-Import Bank as they collaborate to develop the African Continent and promote inter-African trade.”
“I see great prospect for the unfolding Afreximbank-ITFC partnership. But I am mindful that realizing the tremendous opportunities will require determination and hard work. We are committed to invest our resources in that direction”, Kamel said.
In a related development, the Islamic Corporation for the Development of the Private Sector (ICD) and African Export-Import Bank also signed a maiden Line of Financing agreement
The USD 100-million line of financing facility will be utilized by Afreximbank to provide Shariah-compliant financing to small and medium-sized enterprises (SMEs) in its member countries in Africa.
Specifically, the USD 100-million line of financing facility will be utilized by Afreximbank to provide Shariah-compliant financing to small and medium-sized enterprises (SMEs) in its member countries in Africa.
Afreximbank has a solid pipeline of projects in the industrial, communication, technology, healthcare, construction and agricultural sectors that would be financed by the ICD Line of financing.
The CEO of ICD, Mr. Khaled Al Aboodi, commented on this occasion that “the proposed financing facility is a token of a good partnership between ICD and Afreximbank, with the purpose of supporting private sector businesses with a Shariah compliant facility structure in our common African member countries”.
This is even as Executive Vice President at Afreximbank, Mr Kamel enthused that the“facility will give a boost to our effort to implement our current strategy which prioritizes intra-African trade; intra –African investments and export manufacturing of the labour intensive type.”
He also stated that “it will also promote our knowledge in Islamic finance and provide us with additional manoeuvring capacity in terms of product offerings to our clients.”
“We are delighted that ICD has chosen to partner with us in the pursuit of Africa’s trade development. This collaboration will contribute to, the objective of fostering sustainable economic growth in the member countries of our two institutions, leading to job creations, contribution to export and Islamic finance development, among others”, Kamel added.
The key economic and financial developmental impact will be, but not limited to; developing private sector, especially SMEs, to help expand the real economic growth based on value creation, and promoting Islamic Finance based on the pipeline of AFREXIMBANK projects.
The Line of Finance facility is also expected to have an impact on Sustainable Development Goals (SDGs) in line with ICD’s strategic objectives.