Support extended by Etihad Credit Insurance (ECI), the UAE’s federal export credit agency, to the non-oil trade sector exporters jumped 128 per cent last year to Dh11.4 billion ($3.1bn) amid a surge in trade.
The agency protected and facilitated the UAE’s non-oil exports to 92 countries, compared with 75 in 2020, according to an annual company report. These exports covered 18 sectors, compared with 15 in 2020.
The top destination countries for UAE’s exports and re-exports include Saudi Arabia, Iraq, India, Oman, Kuwait and Jordan, among others, ECI said in a statement on Sunday.
“ECI has achieved record-high milestones in its efforts to accelerate national economic diversification and boost [the] UAE’s trade, exports and investments globally,” Abdulla bin Touq, Minister of Economy and board chairman, said during the agency’s first board of directors meeting in Dubai.
“Despite the pandemic’s significant impact on the global economy, ECI has remained committed to its mission of enhancing the growth and competitiveness of UAE businesses by increasing its trade finance support.”
Established in 2018, ECI provides export guarantees and trade insurance for UAE companies to minimise payment risks associated with exporting.
It has partnerships with local and international banks that offer loans to UAE companies to fund exports to overseas buyers, with ECI providing insurance.
The agency issued 6,620 revolving credit limits in 2021, up 229 per cent from the 2,013 facilities it issued a year earlier, while the value of exposure it has underwritten increased by 266 per cent to reach Dh5.6bn from Dh1.53bn in the year 2020, the statement said.
ECI also protected small- and medium-sized enterprises (SMEs) from insolvencies by recovering more than Dh85 million worth of non-payments in the past three years and liquidating claims worth Dh7.9m, according to the statement.
“ECI will continue to put priority on its mandate to enhance national exports and create promising growth opportunities for UAE businesses,” Mr bin Touq said.
‘With strategic partnerships to support the country’s non-oil exports, trade and investments, I am confident that ECI will continue to transform challenges into opportunities to boost the competitiveness of our national economy.”
The board approved the confirmation of Dr Thani Al Zeyoudi, Minister of State for Foreign Trade as the deputy board chairman, as well as the formation of the executive committee, chaired by Saed Al Awadi, chief executive of Dubai Industries and Exports, and the audit and risk committee, chaired by Sameh Al Qubaisi, general manager of economic affairs at Abu Dhabi’s Department of Economic Development.
“ECI’s success is largely due to [the] focused implementation of its 10-year roadmap,” Mr Al Zeyoudi said.
“By securing UAE businesses’ liquidity, protecting their payments and providing access to international markets, ECI has strongly contributed to the acceleration of the UAE’s recovery during the pandemic.”
The ECI management worked to resolve the challenges faced by exporters, particularly the increased costs of financing and higher rates of rejected applications, the statement said.
The agency recorded 510 per cent growth in gross written premium to Dh109.5m last year from Dh17.9m in 2020.
The value of ECI’s short-term trade finance guarantees extended to banks increased to Dh1.1bn in 2021 from Dh680m in 2020, while the value of medium- to long-term trade finance guarantees extended to banks was recorded at Dh574m, according to the statement.
Since it launched operations, ECI supported the UAE’s non-oil gross domestic product by insuring payments of UAE manufacturers and traders for Dh19bn, of which 60 per cent were provided in 2021, the company said.
The top industries that benefited from ECI are chemicals (23 per cent), steel (21 per cent), construction and building material (17 per cent), cables (15 per cent), food (7 per cent), packaging (4 per cent), electronics (4 per cent), health care (3 per cent), and printing (2 per cent), it added.
ECI also plans to provide about $3bn in guarantees to back renewable energy projects in the UAE and its developers operating abroad, Massimo Falcioni, chief executive of ECI, told The National last year.
The export credit agency also plans to support the Operation 300bn initiative launched by the UAE government through its offerings.
The UAE is focused on developing its local manufacturing industry to diversify its economy, create jobs, attract foreign investment, improve local skill sets and export locally made products. As part of its strategy to drive industrial growth, the country aims to double the industrial sector’s contribution to national economic output to Dh300bn by 2031, from Dh133bn currently.