Yemeni-Saudi agreement signed to develop exports [Archives:2006/935/Local News]

April 6 2006

By: Yasser Al-Mayasi
SANA'A, April 5 ) A $3 million project financing agreement was signed last Sunday in Sana'a between Yemen's governmental Cooperative and Agricultural Credit bank (CAC) and the Saudi Export Fund. CAC head Hafiz Mi'ad signed on Yemen's behalf, while Ahmed Bin Mohamed Al-Ghanam, General Manager of the Saudi Fund for Export Promotion, signed for the Saudis. The agreement will support Yemeni importers who import Saudi products.

In a press release, Mi'ad confirmed that signing the agreement will open an investment line enabling Yemen's private sector to import several Saudi goods, adding that CAC will be a direct financer and warrantor of Yemeni importers in Saudi banks. He confirmed that merchants wanting to use the financing can present a feasibility study to CAC, which will send the study to the Saudi Export Support Fund for approval, under CAC's warranty.

Mi'ad recommended that, like the Saudis, a Yemeni export support fund be established, confirming that Yemeni agricultural and fish exports need support. He disclosed that Yemen's government now is studying creating such a fund.

Mi'ad assured that signing the agreement will serve Yemeni exporters, adding that instead of buying commodities and paying 100 percent of the price, they will buy on appointed terms and pay later.

Mi'ad assured that the Saudi Export Fund's choice of CAC did not come from nothing, but was due to developments the bank is witnessing. Al-Ghanam confirmed that the agreement aims to promote Saudi exports and provide facilities by opening six developmental channels at a cost of $3 million. Such channels represent the first step in encouraging Yemeni investors in this field.

A scientific study prepared by Dr. Shabir Abdullah Al-Harazi at Sana'a University's Faculty of Agriculture called for establishing a development bank to support and finance exporters, saying it secures exports by reducing exporters' risks. The study called for exempting exporters from loans and facilities costs, as well as calling for state contribution toward the costs of export companies' participation in foreign exhibitions.

Al-Harazi's study also recommended there be special care of Arab and African markets, with efforts exerted to export local products to these markets. A modern database system and statistical information also require special attention in order to be presented to producers, marketers and exporters.