An additional $3 billion increase in funding from the International Islamic Trade Finance Corp (IITFC) is helping Egypt deal with soaring wheat prices caused by Russia’s war in Ukraine, according to Egypt’s Supply Minister Aly El-Moselhy.
As part of the pact with the Saudi Arabia-based organisation, Egypt’s total funding has been doubled to $6 billion, the minister said in an interview with the MBC TV channel on Monday.
The Jeddah-based IITFC describes itself as an autonomous entity within the Islamic Development Bank Group. The minister didn’t add when the agreement, which also helps cover oil imports, was made, Bloomberg reported.
The IITFC “is the one that pays and covers the country’s wheat imports,” El-Moselhy said. “Therefore, wheat purchases from abroad do not represent any pressure on the central bank.”
The support is key to the North African nation, which is among the world’s biggest buyers of the grain and employs it as the cornerstone of a bread subsidy program used by about 70 percent of its roughly 100 million population, Bloomberg reported.
The war in Ukraine has also contributed to outflows of foreign investment from the local debt market and may curb visits by Russian tourists, previously a significant portion of foreign arrivals.
To stabilise finances, Egypt has turned to its oil-rich allies in the Gulf, securing commitments for at least $22 billion through deposits and investments from Saudi Arabia, the UAE, and Qatar.
Egypt, which previously bought significant amounts of wheat from Ukraine and Russia, has been seeking alternative sources as well as bolstering local production.
The prime minister has said the country’s wheat-import bill is set to rise to $4.4 billion in the fiscal year that ends at the close of June.
The government has bought 2.7 million tonnes of wheat from local farmers since the beginning of the season last month and targets more than 5 million tons total, El-Moselhy said Monday. Egypt’s stockpiles are sufficient until mid-October, he said.
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