Sub-Saharan Africa (SSA) is a priority region for ITFC and for the IDB Group. It is a region facing major developmental challenges, but at the same time, one with tremendous opportunities. The region is vitally dependent upon trade to fuel its economic development and alleviate poverty, while at the same time it is lacking the financial and economic infrastructure to fully reach its trade potential.
Regarding economic growth, Africa is now home to six out the ten fastest growing economies in the world, indicative of the region’s growing importance and its potential to become the new frontier for global investors. Also, on the trade front, Africa has seen strong nominal growth in trade, in line with the surge of world trade. However, the region remains a marginal player in global trade, accounting for only about 3% of total world trade. Furthermore, intra-trade among African countries (a key indicator of regional integration) remains relatively very small as the continent continues to face significant deficit in infrastructure and other logistics vital to the development of trade. In addition, access to trade finance remains a challenge in many African countries, particularly in the least developed countries in Africa.
In that context, more than anywhere else, ITFC’s catalyst role for development of trade among member countries is critical in the Sub Saharan Africa region. In this regard, ITFC has the potential to become the recognized provider of trade finance solutions in SSA but this requires a consistent strategy based on clear formulation of our intent, i.e. be the recognized provider of trade finance solutions in Sub Saharan Africa, with well-formulated strategic pillars.
For the period 1436H-1440H (2015G-2019G), ITFC will focus on the following six strategic pillars for the SSA region:
- Grow relationships to drive trade solution sales
- Enhance utilization for impact and income
- Build partnerships with regional and local banks
- Partner with TCPP & GTRC for capacity building and trade promotion
- Synergize with IDB Group for food security & poverty alleviation
- Build team capacity for sustainable growth
The target is to achieve total yearly financing approvals of $1 billion by the end of 1440H (2019G) and hence become a trade financier of choice in the region.
In terms of sectors, ITFC will prioritize the two strategic sectors of Energy and Agriculture while giving special focus to the following commodities: Cotton, Cocoa, Groundnuts, Cashew, Fertilizers, Tea, Coffee, in addition to petroleum products, food cereals and sugar. In terms of geographical presence, ITFC intends to strengthen its position in the Francophone West African member countries (expected to account for more than 50% of the portfolio), but also develop strong trade sales in East and Southern Africa. We will also seek to selectively develop business from Non-Member Countries in SSA (mainly East African countries) using EFS fund as well as in partnership with BADEA and other funding providers.