African Export-Import Bank (Afreximbank) 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.
Source: Afreximbank (Published June 3, 2022)