Burkina Faso’s cotton industry has received another boost thanks to EUR107m (US$127m) in financing that will be used to support the purchase of seed cotton from farmers and cooperatives.
The investment into the African country has been pledged by the International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IDB) Group.
It will be overseen by textile group Sofitex and is in line with a new $450m Framework Agreement, signed in May with the Government of Burkina Faso for the coming three years.
The financing agreement will support the purchase of seed cotton from farmers and cooperatives, and is expected to have a positive impact on the income of the farmers and improve their living conditions.
“ITFC’s support for the cotton sector in Burkina Faso is in line with its strategy of prioritising its financing to the key sectors driving economic growth and income generation for the people in member countries,” says Hani Salem Sonbol, CEO of ITFC.
He added that the aim is to consolidate ITFC’s financing package for Burkina, leveraging on the ITFC’s ability to mobilise resources from the market while positioning itself as the ‘Cotton Bank of West Africa’.
Burkina Faso has benefited from more than $925m of financing since ITFC’s inception in 2008.
The ITFC also pledged EUR100m in financing for Cameroon’s cotton sector this week, that will be used to buy raw cotton from farmers and process this into cotton fibre for export.