Afreximbank and ITFC Sign US$250 Million Murabaha Financing Agreement to Support African Response to Economic Challenges Posed by the Ongoing Geopolitical Turmoil
Cairo, 03 June 2022 – African Export-Import Bank (Afreximbank) today announced agreed mandate to the International Islamic Trade Finance Corporation (ITFC) to raise a US$250 million Murabaha Financing facility, which will support Afreximbank’s Ukraine Crisis Adjustment Trade Financing Programme for Africa (UKAFPA).
The signing by Eng. Hani Salem Sonbol, CEO ITFC and Prof. Benedict Oramah, President Afreximbank, took place during the 47th Islamic Development Bank (IsDB) Group Annual Meeting in Sharm ElSheikh, Egypt, was witnessed by H.E Dr. Mostafa Madbouly, the Prime Minister of Egypt; H.E Dr. Hala El Said, Egypt’s Minister of Planning and Economic Development; and H.E Dr. Mohammed Al Jasser, President IsDB Group.
The Facility will expand the Bank’s capacity to assist its clients in mutual member countries of both the ITFC and Afreximbank with the procurement of eligible goods, especially key commodities experiencing price inflation.
Afreximbank’s UKAFPA intervention was devised to mitigate the economic challenges created by the conflict in Ukraine, especially the emerging food crisis.
Prof. Benedict Oramah, President of Afreximbank, commented: “The Murabaha facility is the latest in a long standing successful collaborative efforts undertaken with ITFC. I am delighted that both our institutions are determined to promote trade between Africa and the Arab world and thereby create a sustainable economic exchange between constituent members of the Global South. The facility will be pivotal to Afreximbank’s UKAFPA programme that seeks to protect African States from rapidly rising commodity prices and economic disruption arising from the on-going war in Ukraine.”
Commenting on the Murabaha Financing Agreement, Eng. Hani Salem Sonbol, Chief Executive Officer of ITFC, stated: “ITFC is extremely pleased to sign the term sheet with Afreximbank, a long-standing strategic partner of ours. This signing demonstrates the enormous potential of how Islamic finance can play an important role in addressing the twin challenges facing the global economy, which are emanating from the fallout of the pandemic and the current geopolitical situation. The Agreement will help mitigate the economic impact of these challenges while contributing to the economic development of Global South countries through the advancement of trade.”
The ITFC Facility not only strengthens Afreximbank’s ability to intervene to support member states with crucial commodities procurement, but also promotes the Bank’s South-South trade strategy, deepening economic ties between Africa and Arab states.
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. Afreximbank deploys innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. The Bank has a rich history of intervening in support of African countries in times of crisis. Through the Pandemic Trade Impact Mitigation Facility (PATIMFA) launched in April 2020, Afreximbank has disbursed more than US$6.5 billion in 2020 to help member countries manage the adverse impact of financial, economic, and health shocks caused by the COVID-19 pandemic. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has completed the development of a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Afreximbank is working with the AU and the AfCFTA Secretariat to develop an Adjustment Facility to support countries in effectively participating in the AfCFTA. At the end of 2020, the Bank’s total assets and guarantees stood at US$21.5 billion, and its shareholder funds amounted to US$3.4 billion. Afreximbank disbursed more than US$42 billion between 2016 and 2020. The Bank has ratings assigned by GCR (international scale) (A-), Moody’s (Baa1) and Fitch (BBB-). The Bank is headquartered in Cairo, Egypt.
For more information, visit: www.afreximbank.com.
About The International Islamic Trade Finance Corporation (ITFC)
The International Islamic Trade Finance Corporation (ITFC) is a member of the Islamic Development Bank (IsDB) Group. It was established with the primary objective of advancing trade among OIC member countries, which would ultimately contribute to the overarching goal of improving the socio-economic conditions of the people across the world. Commencing operations in January 2008, ITFC has provided US$61.41 billion of financing to OIC member countries, making it the leading provider of trade solutions for these member countries’ needs. With a mission to become a catalyst for trade development for OIC member countries and beyond, the Corporation helps entities in member countries gain better access to trade finance and provides them with the necessary trade-related capacity-building tools, which would enable them to successfully compete in the global market.
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