Islamic trade finance bank signs deals across Africa

The Saudi-based International Islamic Trade Finance Corporation (ITFC) has signed trade financing agreements worth tens of millions of dollars with several African countries at its annual meeting in Uzbekistan.

The agreements provide public and private sector financing, as well as technical assistance for export and SME development initiatives, targeting high growth industries including agriculture, energy and medicine.

The bank, a member of the Jeddah-based Islamic Development Bank group, signed a 3-year, €330m agreement with the island nation of Comoros to support food and energy security by importing strategic commodities including petrol products, rice and other foodstuffs. The agreement will also provide health sector support and SME financing and offer technical assistance to projects geared towards national development goals.

The bank also signed several Murabaha trade financing agreements to support the health, mining and energy sectors in Mauritania. The bank will provide $20m to SNIM, the continent’s second largest producer of iron ore, and $10m to CAMEC, a government entity that distributes medicine to the public sector. The bank has also renewed an existing facility with SOMELEC, a state-owned electricity company.

An October 2018 deal worth $1.5bn signed with Burkina Faso has also been amended. The five-year deal now includes extra support for priority projects in agriculture, health and the private sector. The support includes the export of agricultural commodities and import of energy commodities, such as refined petroleum products, financing to import medicines and health equipment, and the implementation of technical assistance programs for strategic sectors of the national economy.

The Islamic Development Bank Group has 57 shareholding member states, many based in Africa and the Middle East, of which the largest shareholder is Saudi Arabia. The International Islamic Trade Finance Corporation was established with the primary objective of advancing trade among the 57 countries of the Organisation of Islamic Cooperation.

“The impact of these agreements will be significant for ordinary citizens and will greatly enhance their economic prosperity.  This significant milestone also reaffirms the mutual trust between our member countries throughout CIS and Africa regions and the ITFC teams.  Furthermore, ITFC is dedicated to support economic growth among OIC member countries, especially during the challenging times of the COVID-19 pandemic period,” said ITFC CEO Hani Salem Sonbol.