The African Export-Import Bank (Afreximbank) has signed a $250 million Murabaha agreement with International Islamic Trade Finance Corporation (ITFC) to support the African response to economic challenges posed by the ongoing geopolitical turmoil.
The agreed mandate of $250 million in the Murabaha Financing facility, which was signed on the sidelines of the 47th Islamic Development Bank (IsDB) Group Annual Meeting in Sharm ElSheikh Egypt, will support Afreximbank’s Ukraine Crisis Adjustment Trade Financing Programme for Africa (UKAFPA).
The Afreximbank announced the signing by Eng. Hani Salem Sonbol, CEO of ITFC and Prof. Benedict Oramah, President Afreximbank, was witnessed by Dr Mostafa Madbouly, the Prime Minister of Egypt; Dr Hala El Said, Egypt’s Minister of Planning and Economic Development; and Dr Mohammed Al Jasser, President IsDB Group.
It stated that 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, noting that “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, said: “The Murabaha facility is the latest in a long-standing successful collaborative effort 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 the African States from rapidly rising commodity prices and economic disruption arising from the ongoing 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 will 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.
The International Islamic Trade Finance Corporation (ITFC) is a member of the Islamic Development Bank (IsDB) Group, 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.
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