The agreement was finalized during the 49th Annual Meeting of the Board of Governors of the Islamic Development Bank Group, held in Morocco.
Cameroon has signed an US Dollars 800 million an equivalent of CFA 480 billion trade finance agreement with the International Islamic Trade Finance Corporation, ITFC to support key sectors over the next three years. The agreement was finalized during the 49th Annual Meeting of the Board of Governors of the Islamic Development Bank Group, held from April 27 to 30 in Riyadh in Morocco. The new financing represents an increase from the US Dollar 750 million allocated in the previous three-year cycle and will support sectors such as agriculture, energy, and industrial production.
Funds will be allocated to major institutions, including SODECOTON for cotton campaigns, SONARA for petroleum imports, and ALUCAM for raw material imports. According to CEPI Economist and National Coordinator, Haiwang Djamo, access to trade finance remains a challenge for many businesses in Cameroon. While welcoming the agreement, he emphasized the need for local banks to extend at least 15% of total trade financing to small and medium-sized enterprises, SMEs to boost economic growth.
The cotton sector, managed by SODECOTON, saw revenue decline from CFA 187 billion in 2022 to CFA 171.1 billion in 2023 due to global price fluctuations. Cotton prices dropped by 8% between May and June 2024 and by 12% compared to June 2023, impacting exports. The agreement also includes provisions for trade financing support to local banks, allowing them to issue lines of credit and confirm letters of credit for small and medium-sized enterprise, SMEs. Additionally, the funds will facilitate the importation of medicines and medical equipment and support trade development programs under initiatives such as the Arab-Africa Trade Bridges Initiative, AATB.
With the renewed financing, Cameroon aims to enhance the marketing of agricultural commodities, provision of agricultural inputs, and the supply of essential energy products, strengthening its trade and economic framework.
