FINANCING AFRICAN TRADE : Afreximbank secures $250 million from ITFC
[abelainfo] - This financing is granted to Afreximbank with the aim of mitigating the impact of the Russo-Ukrainian conflict on trade in Africa. This funding will support the bank’s operations under the Trade Financing Program for African countries in response to the Ukrainian crisis.
The International Islamic Trade Finance Corporation (ITFC) recently announced that it will provide a Murabaha financing of $250 million to the African Export-Import Bank (Afreximbank). This initiative aims to help Afreximbank mitigate the impact of the Russo-Ukrainian conflict on trade in Africa.
According to a press release issued by the ITFC on April 27, this financing, called « Murabaha, » will be used to support Afreximbank’s operations under the Trade Financing Program for African countries in response to the Ukrainian crisis (UKAFPA – Ukraine Crisis Trade Financing Programme for Africa). The main objective of this program is to facilitate the import and export of strategic products, which will benefit economic operators in the private and public sectors.
The agreement for this financing was signed during the Annual Meetings of the Islamic Development Bank (IDB) held from April 27 to 30, 2024, in Riyadh, Saudi Arabia. The ITFC, a subsidiary of the IDB, emphasized that this agreement will help mitigate the negative effects of the Russo-Ukrainian conflict on African economies.
The Trade Financing Program for African countries in response to the Ukrainian crisis was approved by Afreximbank’s Board of Directors in April 2022. With a funding envelope of $4 billion, this program aims to support intra and extra-African trade, as well as address the economic consequences of the war in Ukraine. It includes lines of credit dedicated to financing the adjustment costs of reorganizing grain and petroleum product imports, stabilizing export revenues from commodities, and financing the deficit in tourism receipts.
This ITFC financing will enable Afreximbank to play a key role in promoting trade in Africa and supporting African businesses facing challenges resulting from the Russo-Ukrainian conflict. By facilitating the import and export of strategic products, this initiative will contribute to stimulating economic growth and strengthening the resilience of African countries in an uncertain global context.
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