Islamic Corporation, AFREXIMBANK agree to finance intra-African trade

African Export-Import Bank, AFREXIMBANK. [Photo credit: Guardian Newspaper]

The International Islamic Trade Finance Corporation, ITFC, and African Export-Import Bank, AFREXIMBANK, on Thursday signed a $100 million and a EUR 50 million agreement to facilitate financing of exports amongst African countries and between Africa and the rest of the world.

ITFC is a member of the Islamic Development Bank, IsDB Group, while AFREXIMBANK is a multilateral financial institution established by African governments and institutional investors to finance and promote intra- and extra-African trade.

The agreements were signed by the CEO of ITFC, Hani Sonbol, and the Executive Vice President, Business Development & Corporate Banking of AFREXIMBANK, Amr Kamel.

The signing ceremony was held during the Afro-Arab Trade Finance Forum organised by the Arab Bank for Economic Development in Africa, BADEA in Dubai under the Arab Africa Trade Bridges Programme.

A statement at the end of the agreement explained that the financial facilities were intended to support procurement from suppliers from member and non-member countries, including local purchases, to promote trade across Africa.

Mr. Sonbol said the partnership between ITFC and AFREXIMBANK was part of the 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 said that the partnership would be utilised to finance African Organisation Islamic Conference, OIC, member countries under the “Arab-Africa Trade Bridges” Programme, a regional trade promotion programme aimed at addressing some of the challenges faced in promoting trade between the two regions and supporting South-South cooperation.

The ITFC CEO, who delivered a keynote speech at the opening session of the Forum, 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.

On his part, AFREXIMBANK Executive Vice President, Amr Kamel, said the bank saw the partnership agreement as a stepping stone towards greater collaboration in pursuit of the Bank’s shared vision with ITFC.

He said that ITFC had demonstrated that it stood 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,” Mr. Kamel said. “But, I am mindful that realising the tremendous opportunities will require determination and hard work. We are committed to invest our resources in that direction.”

Murabaha is a transaction arrangement under which a bank, rather than loan money to the client, “purchases the goods from a third party and then sells them to the client at a preset price”.

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