The ITFC’s support to the Kingdom focuses on Morocco’s strategy under the AATB program to consolidate its status as a regional hub in Africa.
During the pandemic, ITFC took a blended approach, combining commercial funding lines, capacity-building programs and grants to IDB member countries.
Interview with Hani Salem Sonbol, CEO of the International Islamic Trade Finance Corporation.
Interview with Mr. Diao
Hebdo financial news: what conclusions can you draw from the partnership between the ITFC and Morocco?
Hani Salem Sonbol: For ITFC, Africa is one of the geographic areas with a significant number of member countries and Morocco is one of the founding countries of the Islamic Development Bank (IDB) group and the ITFC. The Kingdom, considered the gateway to Africa, plays a leading role in supporting the ITFC. Morocco’s strategy led by King Mohammed VI to strengthen relations with African countries is a facilitating element for the implementation of ITFC programs. The Arab-African Trade Bridges (AATB) program launched in 2017 under the High Patronage of His Majesty the King is one of the best examples. During the onset of the Covid-19 pandemic, Morocco played a key role in creating an emergency knowledge sharing plan with French-speaking OIC member countries to support national staff and committees to better understand the Covid-19 and share best practices.
The Moroccan Society of Anesthesia, Analgesia and Resuscitation (SMAAR), in collaboration with IsDB and ITFC, has developed an online platform to facilitate learning and sharing, as well as a series of webinars, which have benefited thousands of healthcare professionals in Africa. Furthermore, ITFC support to Morocco focuses on Morocco’s strategy under the AATB program to consolidate its status as a regional hub in Africa, through direct financing to large Moroccan companies and banks in their trade in the sub-region. ITFC has also begun to explore co-financing with Moroccan banks for commercial financing transactions related to exports of Moroccan products to Sub-Saharan African countries or the financing of the import of strategic products.
FNH: The International Islamic Trade Finance Corporation (ITFC) recently launched the fifth edition of its Annual Development Effectiveness Report (ADER) entitled “Harnessing Disruption to Build Back Better”. What do you think are the opportunities created by the pandemic for OIC member countries?
HSS: The 5th edition of the ITFC ADER report analyzes the significant impact caused by the Covid-19 pandemic in the world. The past year was a year like no other. However, it was also full of opportunities thanks to the many interruptions that have influenced our daily life, bringing out the best in us and pushing us to innovate. Furthermore, it was a year in which we thought about the future we want and the role we envision to achieve it. The report outlines ITFC’s solutions and business development programs, focusing on selected thematic or operational aspects of its interventions. ITFC works to provide comprehensive solutions to complex development problems.
Our integrated solutions have helped our member countries mitigate the immediate effects of the pandemic and lay the foundations for a better future. Furthermore, digitization has created new opportunities for international trade. Sure, this trend started before the pandemic, but it gained momentum in 2020 as digital technologies and e-commerce became effective tools for making a solid recovery. Recognizing that the digital divide poses a serious threat and could prevent fair sharing of benefits, ITFC aims to ensure that the ongoing digitization is fair and inclusive. In 2020, ITFC has managed to launch e-commerce solutions to some customers and will redouble its efforts to encourage inclusive commerce through new digital solutions. The pandemic also highlighted the importance of data sharing to improve our operations. Global challenges require multilateral cooperation and the sharing of solutions.
FNH: Has the pandemic changed ITFC’s priorities in any way?
HSS: As the pandemic accelerated, the ITFC responded promptly to help member countries respond to the immediate public health emergencies and socioeconomic impact of the crisis. ITFC’s response to the crisis has been aimed at providing support to our customers, enabling them to meet their immediate needs during the spread of the virus and strengthening their resilience to long-term external shocks. As part of the IDB Group’s Strategic Preparedness and Response Program (SPRP), we have provided approximately $ 495 million in commercial financing to support our customers. This has helped them alleviate the health crisis, restore commercial supply chains, provide affordable and quality food products and maintain jobs in small, medium and micro businesses.
ITFC took a blended approach, combining commercial funding lines, capacity development programs and grants, which allowed us to maximize impact on customers affected by the crisis. In addition, $ 15 million was provided to the healthcare sector to mitigate the immediate impact of the pandemic, allowing member countries to purchase personal protective equipment (PPE), PCR kits, medical and pharmaceutical products. More than 62,000 patients, 2,500 healthcare workers and 40 medical facilities have benefited from it around the world. Healthcare was not the ITFC’s only priority. Considering the economic consequences of the crisis, ITFC has, among other things, disbursed $ 484 million in food imports to ensure the supply of affordable, safe and sufficient food for more than 25 million households in OIC member countries. . This resulted in a 15% increase in ITFC funding for the food safety sector, one of the organization’s priorities.
FNH: What are the ITFC flagship projects for 2021?
HSS: The Covid-19 pandemic has profoundly influenced and influenced the achievement of the Sustainable Development Goals (SDGs). What began as a health crisis created an unprecedented economic shock, with overall growth down 3.3% (IMF 2021) and the loss of some 255 million full-time jobs (UNWTO 2020). For the next steps, we must all adapt to new realities. ITFC’s five-year strategy, which is no less relevant, has been refined to better manage outages. Now more than ever we must promote a strong, inclusive and sustainable recovery in line with the SDGs.
FNH: Finally, what are your ambitions and achievements in terms of supporting entrepreneurship in the various countries of intervention, including Morocco?
HSS: The private sector is a priority for ITFC and has been even more so during this year of crisis, becoming one of the main pillars of the Covid-19 crisis response program. Our entity specifically approved 11 credit lines worth USD 133.2 million as part of the IDB Group’s response to the fight against the Covid-19 pandemic. A total of $ 373 million was disbursed through 26 partner banks to 7,500 SMEs. ITFC has also stepped up its West African SME program which aims to improve SMEs’ access to finance during this Covid-19 crisis period. ITFC has also launched its “LC Confirmation” product aimed at supporting the private sector and SMEs of member countries in the international market.
Only in 2020 did we establish new partnerships with banks and financial institutions in member countries such as Bangladesh, Maldives, Ivory Coast and Uzbekistan. The total number of private sector customers increased by 25% compared to last year. In early 2020, ITFC and IDB launched the “SheTrades Morocco” program focusing on SMEs owned or managed by entrepreneurs in the processed food sector. This initiative aims to improve the export capacity of women-owned businesses in Morocco, facilitate their compliance with market needs and thus integrate these female entrepreneurs into global agribusiness value chains. Since the beginning of 2021, the remaining amounts in terms of disbursements to the private sector have amounted to almost 40 million dollars.