The UAE federal export credit company, Etihad Credit Insurance (ECI) has emphasized the role of government-supported export credit agencies in filling financial gaps in trade and export businesses, especially in meeting the short-term working capital requirements, at the TXF Middle East & Africa: Export and Project Finance 2022.
During the keynote address at the event, Mr. Massimo Falcioni, CEO of ECI stated that, at the beginning of COVID-19, the OECD had predicted that governments would look at their export credit agencies (ECAs) to fill any financing gaps left by the private market. They predicted that ECAs would be able to mitigate the impact of the crisis by engaging in short-, medium- and long-term business finance.
Mr. Falcioni remarked that “True enough, we have seen trade and export-related businesses experiencing trade finance problems due to increased costs of short-term financing for SMEs and higher rates of rejected applications. In response to this, government-backed ECAs have responded timely by increasing their trade finance support to businesses. At ECI, our support to UAE exporters in the non-oil sector increased by 260 percent in 2021 to AED18 billion compared to AED5 billion in the previous year.”
The ECI CEO further added that at the recently concluded and ECI-hosted meeting of the Berne Union’s Prague Club Committee in Dubai, it was revealed that government-backed ECAs have responded timely by increasing their trade finance support to businesses.
“Short-term export credit is indeed now the biggest business among PCC member countries in 2021. It is the only segment of export credit that witnessed a significant upward trend, with a 7 percent year-on-year increase in the first half of 2021 compared to the same period in 2020,” Mr. Falcioni added.
Mr. Falcioni also stressed the need to open up untapped business opportunities between the Middle East, North Africa (MENA), and Sub-Saharan Africa (SSA) regions.
“The expanding trade and infrastructure projects development in renewable energy and healthcare between the Middle East and African regions highlights new avenues of economic cooperation and prospects for forming mutually beneficial partnerships between the ECAs in the respective countries,” Mr. Falcioni noted.
The summit underscored the need for the MENA and SSA countries to work together to tackle climate change through the transition to renewable energy, as climate change and sustainability are at the heart of the program.
The huge success of Expo 2020 has Dubai has become a major impetus for enhancing regional connectivity as it emphasizes the importance of leading economic growth for communities through sustainable development.
Considered to be one of the most important gatherings of export credit agencies and project finance in the world, TXF Middle East & Africa: Export and Project Finance 2022, examined the broad trends affecting the Middle East and Africa before being divided into centralized regional streams.
