OPEC Fund Chips In for $200MM Financing for Egypt Food Security

OPEC Fund Chips In for $200MM Financing for Egypt Food Security
The OPEC Fund has committed $10 million to Egypt for the import of vital food and agricultural commodities.
Image by kckate16 via iStock

The OPEC Fund has committed $10 million to a $200 million credit facility for Egypt meant for the import of vital food and agricultural commodities.

"Egypt is the world’s largest wheat importer and relies heavily on global trade for essential commodities such as grains, vegetable oil and animal proteins to meet domestic demand", the development lender noted in a recent press release announcing the contribution for the syndicated facility led by the International Islamic Trade Finance Corp. "Following the global repercussions of the war in Ukraine and higher commodity and food prices, Egypt has prioritized securing grain supplies and ensuring food security".

The North African country relied on Russia and Ukraine for over 70 percent of its wheat imports 2021, the year before Russia invaded Ukraine, according to data from the United Nations Food and Agriculture Organization in a paper published June 10, 2022.

In the midst of the war, the export of grains from Ukraine has depended on a deal brokered by the United Nations and Turkey between the warring sides to allow safe shipping for Ukrainian foodstuffs and fertilizers to reach world markets. But Russia has since July 17 suspended its participation in the Black Sea Grain Initiative, demanding sanctions on Russian companies engaged in agricultural trade be lifted, as stated in a statement from the Russian Foreign Affairs Ministry September 6.

The OPEC Fund announcement said, "Egypt has responded to food security challenges with a comprehensive food security strategy, which combines support for domestic production with diversification of imports and the enhancement of sustainable agricultural practices".

"The OPEC Fund's contribution to the trade finance facility will support Egypt’s strategy to ensure food security and aligns with Sustainable Development Goal 2 - Zero Hunger, as well as with the OPEC Fund’s own US$1 billion Food Security Action Plan", the news release added.

OPEC Fund Director-General Abdulhamid Alkhalifa said in a statement, "The OPEC Fund's participation in this vital trade finance facility underscores our commitment to helping solve food security challenges".

Earlier the OPEC Fund announced a $500,000 grant for Morocco meant for immediate and medium-term humanitarian relief efforts in the quake-devastated country. A 6.8 magnitude earthquake hit the North African nation September 8, as reported by the United States Geological Survey.

Nearly 3,000 people have been confirmed dead while 5,500 others have been injured, according to the latest figures from the United Nations Office for the Coordination of Humanitarian Affairs updated Friday. Over 380,000 people have been affected, the office said, calling the quake Morocco's deadliest since 1960.

"The OPEC Fund’s emergency aid will address critical needs including the provision of food, safe water and shelter, as well as protection and prevention measures as part of the overall relief operation", the OPEC Fund said in a media release September 15.  "The grant is intended to assist the most vulnerable segments of the population such as families, children, people with disabilities and the elderly".

The grant was to be channeled through the International Federation of Red Cross and Red Crescent Societies, the OPEC Fund said.

The OPEC Fund, founded 1976 by members of the Organization of Petroleum Exporting Countries (OPEC), runs on members’ voluntary capital contributions.

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