DUBAI, 17th March, 2022 (WAM) — Etihad Credit Insurance (ECI) has highlighted increasing role of government-backed export credit agencies in filling in the financing gaps in trade and export businesses, especially in meeting the short-term working capital needs, at the TXF Middle East & Africa: Export and Project Finance 2022.
Delivering the keynote address at the event, Massimo Falcioni, CEO of ECI, said that at the onset of COVID-19, the OECD predicted that governments would look to their export credit agencies (ECAs) to fill any financing gaps left by the private market. They have forecasted that ECAs would have to mitigate the impact of the crisis by engaging in both short-term and medium- and long-term trade finance.
“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 AED 18 billion compared to AED 5 billion in the previous year,” Falcioni said.
He added that in the recently concluded and ECI-hosted meeting of the Berne Union’s Prague Club Committee here 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,” he said.
Falcioni also stressed the significance of unlocking the untapped business potentials between the Middle East and 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,” he added.
The enormous success of Expo 2020 Dubai has become a great stimulus in boosting the ties between the regions as it stresses the importance of driving economic growth for communities through sustainable development. With climate change and sustainability taking centre stage at the event, the summit underscored the need for the MENA and SSA countries to join forces to tackle the climate challenges through a transition to renewable energy.
Deemed as one of the most important gatherings of export credit agencies and project finance in the world, the TXF Middle East & Africa: Export and Project Finance 2022 took place on March 15-16 at Grand Habtoor Resort, Dubai. ECI is the main Host Partner.