OPEC Fund Annual Report 2023

03 | THE RESULTS – OTHER FUNDING

KEEPING STAPLE IMPORTS FLOWING TO EGYPT

Trade finance plays a critical role in ensuring staple foods and other basic commodities reach the most vulnerable populations. In 2023, the OPEC Fund provided US$273 million in trade finance facilities to partners worldwide.

Food security is a key challenge for the Egyptian government, given that around 30 million people — close to 30 percent of its rapidly growing popu- lation — are living below the poverty line, according to the World Bank. As poverty and hunger go hand in hand, there are clear knock-on effects for the most vulnerable members of society, in particular children and adoles- cents. Malnutrition is a major concern across Egypt, with a national stunting rate of 13 percent and with 4 percent of children under the age of 5 reported as underweight, the UN World Food Programme says. The food subsidy system has long been a mainstay of Egyptian government policy for tackling social imbalances and promoting stability. A safety net for poorer communities, the subsidy ensures the availability and affordability of various staples — including bread to this day sold at prices set in 1989. This policy has in turn helped to reduce infant mortality and malnutrition, while softening the adverse effects of economic reforms and structural adjust- ments. Yet, with a growing population, high commodity prices and rising inflation, the system appears increasingly unsustainable — especially given Egypt’s status as the world’s largest importer of wheat and its heavy reliance on global markets for more than half its staple foods. Providing some relief to this situation is the OPEC Fund’s US$10 million par- ticipation in a US$200 million syndicated facility arranged by the International Islamic Trade Finance Corporation (ITFC). Representing a key contribution to the OPEC Fund’s Food Security Action Plan, the loan will finance the import of various essential food and agricultural commodities. In total, OPEC Fund trade financing for Egypt stands at US$610 million since inception.

ERNESTO AGUIRRE OPEC Fund Investment Manager

Our commitment aims to maintain the stock of food commodities such as wheat, corn, rice, sugar and soya bean oil. The OPEC Fund is working to strengthen its partnerships to enhance global food secu- rity. Through this project and with ITFC as key partner we are fostering the devel- opment of the OPEC Fund’s US$1 billion Food Security Action Plan, addressing a key global challenge.