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Two institutions sign $50m credit agreement to finance trade between Arab and African countries

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TradeThe Arab Bank for Economic Development (BADEA) has signed a $50 million line of credit agreement with the Afreximbank.

According to a press release issued by Afreximbank and copied to ghanabusinessnews.com, the line of credit issued to Afreximbank would be used to finance trade between Arab and African countries.

Dr. Sidi Ould Tah, Director General of BADEA, and Dr. Benedict Oramah, President of Afreximbank signed for their respective institutions in Kahrtuom April 28, 2016.

The two institutions also signed a memorandum of understanding for a framework for cooperation in promoting economic and social development of African countries through the funding of private sector projects and trade finance operations.

BADEA officials indicated that the line of credit, which is part of its programme for financing foreign trade, will target energy, industry and agriculture.

Incidentally, bilateral trade between Arab and African countries is low. Figures are hard to find, but trade between the Arab countries and Africa is considered weak, as trade is largely between large industrial countries and often involves raw materials.

For instance, while in 2012 international trade volume of commodities and services amounted to around $44 trillion of which international exports was around $22 trillion, the quota of Arab countries as exports was around $1.2 trillion and imports was approximately $770 billion. Most of the trade by Arab countries was with the United Sates and the European Union.

By Emmanuel K. Dogbevi

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