TDB, MIGA and OCP Group to Enhance Collaboration in Africa to Boost Food Security
Marrakesh, 12 October 2023 – The Eastern and Southern African Trade and Development Bank (TDB), the Multilateral Investment Guarantee Agency (MIGA) and OCP Group have signed a Memorandum of Understanding (MoU) today, during the World Bank Group and International Monetary Fund Annual Meetings, to enhance collaboration in addressing agriculture and food security challenges in Africa.
Specifically, the three parties have agreed to identify suitable areas for deploying MIGA’s risk mitigation instruments. They have expressed willingness to collaborate in trade finance transactions, using MIGA’s guarantees for the importation of strategic commodities including fertilizers in Africa.
This collaboration aims to enhance food security, promote employment and farmers’ livelihoods, secure their access to international markets, bolster productivity, and increase foreign exchange availability and earnings by facilitating the export of commercial crops.
This MoU follows a first-of-its-kind credit enhancement facility signed in 2020 between MIGA and TDB via which MIGA provided a 10-year guarantee for commercial bank financing extended to TDB with longer tenors and lower interest rates. This facility has so far succeeded in supporting transactions worth over USD 300 million in TDB member states, making it possible for their corporates, financial institutions, and public sector to import commodities which are vital to their food and energy security, foreign exchange earnings, employment, and tax revenues.
The MoU further strengthens TDB’s long-standing relationship with OCP Group, thanks to which, USD 2 billion of fertilizer imports from Morocco were facilitated into the TDB region over the past six years.
Among several milestones, TDB and OCP Group collaboratively executed the first-ever intra-Africa trade finance transaction using blockchain technology. In 2022 alone, three-quarters of the USD 700 million in transactions OCP Group and TDB completed together were realized using this technology, resulting in important savings in terms of time, costs, and carbon footprint.
The parties expect to enhance their cooperation in promoting stable and sustainable economic growth and further economic and trade cooperation in Africa.
Admassu Tadesse, TDB Group President Emeritus and Managing Director said: “With this MoU, we are expanding our strategic partnerships with both MIGA and OCP Group, with whom we have successfully rolled-out pioneering and impactful trade finance solutions. We look forward to doing more together to promote intra-African trade and help our region better source the essential commodities it needs to safeguard socio-economic development, especially during this complex period marked by severe global shocks and macroeconomic challenges.”
Hiroshi Matano, Executive Vice President of MIGA, said: “Food security is a high priority for MIGA, and we look forward to working more closely with TDB and OCP, our long-standing partners, to help support food security challenges as well as access to trade finance in Africa by providing de-risking solutions to the exporter and a regional development bank. MIGA is eager to expand partnerships to support economic advancement in emerging markets.”
Mostafa Terrab, Chairman & CEO of OCP Group said: “OCP is actively supporting African farmers through the reliable supply of cost-effective crop nutrients, tailored to boost yields based on specific crops, soils and local conditions. This agreement with TDB and MIGA builds on our successful track record of co-operation in promoting food security, enhancing the livelihoods of farmers and fostering sustainable rural development across Africa.”
Established in 1985, the Eastern and Southern African Trade and Development Bank (TDB) is a regional development finance institution with investment-grade ratings and assets totaling USD 8.4 billion. TDB serves 25 economies in its region, with the mandate to finance and foster trade, regional economic integration, and sustainable development.
TDB is part of TDB Group, which also comprises the Trade and Development Fund (TDF), Eastern and Southern African Trade Advisers Limited (ESATAL), TDB Captive Insurance Company (TCI), and the TDB Academy.
MIGA was created in 1988 as a member of the World Bank to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over $76 billion in guarantees across 123 developing countries, supporting more than 1,000 projects. Over the past decade, MIGA’s guarantees have generated more than 156,000 jobs in developing countries.
OCP plays an important role in feeding a growing global population, by providing essential elements for soil fertility and plant growth. With a century of experience and revenues reaching US$ 5.9 billion in 2020, OCP is a leader in plant nutrition and the world’s first producer of phosphate-based fertilizers. OCP provides a wide range of customized fertilizer products to enhance soil, increase agricultural yields, and help feed the planet in a sustainable and affordable way. Headquartered in Morocco and present on five continents, OCP works in close partnership with more than 160 customers across the world. Closer to home, OCP is committed to help drive forward Africa’s environmental and social development and implement sustainable and prosperous agriculture through innovation. The Group is firmly convinced that leadership and profitability are necessarily synonymous with social responsibility and sustainable development. Its strategic vision is rooted in the meeting of these two dimensions.
Subhash Ghimire, email@example.com
For more information, please visit: http://www.miga.org