Egypt has signed a US$1.1bn deal with the International Islamic Trade Finance Corporation (ITFC) to finance petroleum products and other commodity imports in 2020.
The funds are part of a US$3bn agreement between the country’s Ministry of Investment and International Cooperation and the ITFC, signed in January 2018, says the Egyptian government in a statement. It adds that enabling the local market access to petroleum products is one of the ministry’s top priorities.
“This agreement is a genuine partnership with the ITFC in order to provide more basic goods to citizens,” says Egypt’s supply minister Ali Moselhy.
The statement does not stipulate what portion of the money will be allocated to various commodities, such as wheat purchases, one of Egypt’s biggest imports and one which supports the country’s bread subsidy programme, a scheme that more than half the population are reliant on. A decision to cut bread subsidies led to riots across the country in 1977 and more recently, in 2017, there were reports of protests over cuts to bread subsidies.
Hani Salem Sonbol, CEO of ITFC, says the agreement will support the global campaign, Better Cotton Initiative (BCI). The United Nations Industrial Development Organization (UNIDO), under the framework of the Egyptian Cotton Project, launched a in February 2019 to support Egyptian cotton as part of a renewed drive to increase product sustainability.
The news follows a string of deals for the ITFC. Earlier this month, it struck its first sovereign deal with Uzbekistan for US$50mn to boost the country’s agricultural exports. In November, the ITFC committed to a credit facility agreement worth US$100mn with the African Export-Import Bank (Afreximbank) to increase trade between Arab and African countries. The organisation also signed a deal with the Maldives for US$1.5bn for the country’s fishing and fuel sectors. In April, the ITFC signed six trade finance and development agreements worth more than US$1.1bn. Through the deals, the ITFC will provide state and private sector financing as well as capacity building programmes for export and SME development initiatives.