Cairo – January 16, 2024: Egypt is set to receive $250 million in a Sharia-compliant trade loan facility from the Africa Finance Corporation (AFC), in partnership with the International Islamic Trade Finance Corporation (ITFC), to support purchases of certain essential commodities.
Meticulously structured per Sharia principles, the trade loan represents a dynamic response to the evolving economic landscape in Africa, the AFC explained.
“This underscores AFC’s commitment to collaborate with powerful partners such as the ITFC to deliver the financial innovation required to transform the African continent by driving local manufacturing, domestic value-addition of primary commodities, and local job creation,” explained Samaila Zubairu, President and CEO of AFC.
According to the AFC, the loan will be distributed evenly between the Egyptian General Petroleum Corporation (EGPC) and General Authority for Supply Commodities (GASC).
The EGPC will utilize its share of the loan to purchase crucial fuel and petroleum products, while the GASC will use its share to improve food security by facilitating the imports of agricultural commodities, such as wheat, corn, vegetable oils, and sugar.
CEO of the International Islamic Trade Finance Corporation, Hani Salem Sonbol, stated that the loan reaffirms the ITFC’s commitment to supporting the economic growth and stability of its members, noting that the $250 million loan reflects the “strength and power of multilateral financial institutions coming together to address Africa’s economic challenges”.
Egypt was formally welcomed into the Africa Finance Corporation in March 2023 as its first North African sovereign shareholder. The AFC and ITFC provided Egypt with loan facilities worth $50 million back in November 2022.
Islamic banking represented 5 percent of the overall Egyptian banking market after reaching LE 562 billion in September 2023, according to a November report by the Egyptian Islamic Finance Association (EIFA).