Agreement signed to enhance trade between Organization of Islamic Cooperation and Africa
RIYADH: An agreement has been reached with the aim of boosting economic activities between member states of the Organization of Islamic Cooperation and those of the Eastern and Southern African Trade and Development Bank.
This TDB and the International Islamic Trade Finance Corp., a member of the Islamic Development Bank Group, signed a memorandum of understanding during the World Bank Group and International Monetary Fund annual meetings in Marrakech, Morocco, according to a statement.
Under this MoU, both organizations will collaborate to provide trade finance solutions, with the aim of better serving their respective member countries in Africa, as stated in a press release.
These solutions encompass various investment products, including Murabaha, syndications, co-financing, risk-sharing, and Islamic factoring.
Murabaha is an Islamic financing structure that works as a sales contract, fixing the price of goods or items as required by a customer, inclusive of a pre-agreed profit margin.
Furthermore, this partnership will explore opportunities for technical assistance and capacity building, focusing on the private sector and small and medium enterprises located in their shared member states.
Admassu Tadesse, TDB group president emeritus and managing director, said: “Today’s signing builds on various years of collaboration between TDB and ITFC whereby TDB participated with close to $400 million in six ITFC Islamic syndications, in favor of TDB member states for the purchase of strategic food and energy commodities.”
TDB Group Corporate Affairs and Investor Relations Executive Mary Kamari said: “Our reinforced cooperation will enable our institutions to optimize the impact of our financing.”
She further emphasized that the group aims to collaborate on capacity-building and technical assistance to empower the private sector in capitalizing on the existing opportunities.
CEO Hani Salem Sonbol, representing ITFC, elaborated that the MoU signifies a significant milestone in the institution’s continuous endeavors to promote international trade and economic development.
“By partnering with TDB, we aim to amplify our impact, facilitate more efficient trade flows, and offer targeted support to SMEs and private sector entities in our African member countries,” Sonbol stressed.
TDB’s mission is to be a catalyst for trade development among OIC member countries, while ITFC seeks to increase their influence, contribute to facilitating more efficient trade flows, and provide targeted support for SMEs, Sonbol highlighted.