Economy

Islamic trade finance swells govt coffers with 489 BFCFA loan.

by Edmond
10 May 2024 19:29
548 views

Minister Alamine Ousmane Mey, exchanging documents with the CEO of ITFC after loan agreement was signed

The International Islamic Trade Finance Corporation, ITFC, which is the international financing arm of the Islamic Development Bank, IsDB Group, has approved a loan amounting to some 489 billion FCFA to enable government carry out critical development projects.
We gathered that the signing for the disbursement of the money took place on the sidelines of the 49th annual meeting of the IsDB Group Board of Governors.

The strategic was held from April 27 to 30 in Riyadh, the Saudi Arabian capital.

Specifically on the amount agreed on, it was disclosed that money was estimated at 800 million USD. This is a little over 489 billion FCFA.

The Minister of the Economy, Planning and Regional Development, Alamine Ousmane Mey, confirmed the signing of the agreement in a statement issued April 29.

The official statement reiterated that the funding package resulted from a cooperation framework agreement signed by Minister Alamine Ousmane Mey, and the Chief Executive Officer, CEO, of ITFC, Hani Salem Sonbol.

Per the agreed terms, the money will be gradually disbursed as loans over the 2024-27 period.

According to the ministry’s statement, the resources will be allocated to finance operations agreed upon by both parties, particularly in the following areas; marketing of agricultural commodities such as cotton, provision of agricultural inputs and basic energy products, including oil, alumina and electricity.

The money will also be used in the provision of financing lines and confirmation of letters of credit to local banks to support Small and Medium-sized Enterprises, SMEs.

Not leaving out the facilitation of access to medicines and medical equipment, as well as capacity building under special programmes such as the Arab-Africa Trade Bridges Initiative, AATB.

The latter aims at supporting trade and investment flows between Arab and African countries.

It is worth recalling that when this is compared to the previous 3-year agreement between the two parties, this new package represents an increase of 50 million USD, or +6.6%.

Indeed, in April 2021, Cameroon and ITFC signed a cooperation framework agreement worth 750 million USD.

But the money was not fully disbursed. Cameroon received 80% of the total funding, amounting to 602.4 million USD, according to official figures.

However, the money received enabled the beneficiary to back cotton campaigns by the Cotton Development Corporation, SODECOTON, cushion the effects of imports of petroleum products by the National Oil Refining Corporation, SONARA, which remains, till date and despite its being burnt down, the country's sole refinery.

The money was also used to import raw materials for Cameroon Aluminum Company, ALUCAM. 105 million USD was specifically earmarked for the cotton and soybean sectors, directed to SODECOTON for acquiring agricultural inputs like fertilizers, pesticides, and herbicides, as well as purchasing cotton and soybean seeds for distribution to farmers in the country.