Etihad Credit Insurance (ECI), the UAE's export credit agency, issued 7,307 revolving credit guarantees worth Dh4.8 billion ($1.3bn) in the first five months of the year, significantly helping to boost the country’s non-oil foreign trade, Abdulla bin Touq, Minister of Economy, said.
ECI-issued credit guarantees until May covered Dh14.4bn worth of short-term insured non-oil trade to more than 111 countries, Mr bin Touq, who is also chairman of ECI, said in a statement on Sunday.
This performance of ECI, achieved against the backdrop of current global economic challenges, helped to increase the UAE’s overall non-oil foreign trade by more than 17 per cent during the first three months of the year, he said, citing initial economic data.
The ministry intends to further diversify the UAE's export markets as part of the next phase of its growth strategy, and ECI plays a crucial role in supporting that objective, he said, while chairing the agency's second board meeting of 2022.
“Through various undertakings, collaborations and trade credit solutions, ECI has supported SMEs [small and medium enterprises] by opening new markets and improving their competitiveness to support economic diversification policies and achieve the UAE's vision and directions for the next stage of development,” Mr bin Touq said.
ECI, which launched operations in 2018, is responsible for supporting the export and re-export of UAE goods and services and foreign investments of local businesses.
The agency is among the central planks of the UAE’s economic diversification agenda and supports exporters through a range of credit, financing and investment insurance products. Since 2020, it has also started providing credit insurance support to domestic non-oil trade and project financing guarantees to businesses.
ECI has partnerships with local and international banks that offer loans to UAE companies to fund exports to overseas buyers, with the agency providing insurance.
The agency’s credit guarantees through May have benefited 15 growth sectors. Businesses secured guarantees worth Dh6.7bn for international trade, Dh7.6bn in domestic trade, Dh1.2bn in medium and long-term trade and Dh1.3bn in political risk insurance, according to the ministry statement.
The top sectors that benefited from ECI's support included logistics (18 per cent), electrical equipment and electronics (18 per cent), machinery and equipment (16 per cent), the metal industry (12 per cent), petrochemicals and chemicals (9 per cent), heavy industry (7 per cent), financial services and banks (6 per cent), pharma and health care (4 per cent), and food and beverage business (4 per cent) among others.
The breakdown of secured non-oil trade that ECI facilitated for each emirate for the past five months is as follows: Abu Dhabi (Dh1.9bn); Dubai (Dh9.9bn); Sharjah (Dh1.5bn), Ras Al Khaimah (Dh504 million), Fujairah (Dh102m ), Ajman (Dh282m) and Umm Al Quwain (Dh159m), according to the ministry.
The key destination countries for the UAE's exports and re-exports protected by ECI's trade insurance coverage included the UAE, Saudi Arabia, Egypt, India, the UK, Oman, Kuwait, the US, Italy and Ghana, among others.
“The UAE takes it [as] a priority to meet the varying needs of national companies and exporters, as well as reinforce the country's leading position as a regional and international hub for re-exports,” said Dr Thani Al Zeyoudi, Minister of State for Foreign Trade and deputy chairman of ECI.
“ECI is focused on supporting sectors that diversify the economy towards non-oil GDP [gross domestic product] and bolstering sectors that are a national priority for economic self-reliance and those that offer stable growth for the future.”
The agency in July formed a partnership with the Hamriyah Free Zone Authority and the Sharjah Airport International Free Zone Authority (Saif Zone) to help exporters and re-exporters in Sharjah expand their international business.
Earlier this year, it signed an agreement with the Export Credit Guarantee of Egypt to bolster bilateral trade and economic co-operation.
It also signed a preliminary agreement with Turkey’s export credit agency Turk Eximbank to enhance trade and boost business and commercial relations between the two countries.
In 2021, the agency extended Dh11.4bn worth of support to non-oil trade sector exporters amid a surge in operations as global economies recovered from the coronavirus pandemic.
The agency also facilitated the UAE’s non-oil exports to 92 countries last year, compared with 75 in 2020, according to its annual report. These exports covered 18 sectors, compared with 15 in 2020.