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Citi launches sustainability-linked supply chain financing in Algeria

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A Press Release of Zawya‘s FINANCIAL SERVICES informs that Citi launches sustainability-linked supply chain financing in Algeria. Here it is.

The above image is for illustration and is of the ICC Academy.

12 January 2022

Dave Aldred, Citi Regional Head of Treasury and Trade Solutions – Middle East and North Africa, Bülent Pehlivan, Henkel Regional Head of Finance – India, Middle East and Africa, Daniel Lopez Wismer – Regional Treasurer of India, Middle East, Africa & Turkey (next to Dave)

Algeria – Citi has launched its first Middle East and North Africa (MENA) Sustainability-linked Supply Chain Finance (SSCF) program in Algeria with the aim of supporting clients as they advance their ESG priorities, improve the resilience of their supply chains and manage their working capital needs. 

Supply Chain Finance (SCF) programs benefit companies and their suppliers as they prioritize their working capital positions respectively. In using Citi’s SCF program, for example, the bank would provide financing to a client’s suppliers from the date of collection of specific goods/provision of services to the date on which payment is owed to these suppliers. The cost of this financing is borne by suppliers at a rate lower than their usual cost of funds. As a result, suppliers benefit from cash flow acceleration, quicker payment, and improved financing costs. 

Citi’s first MENA SSCF program has been implemented for German chemical and consumer goods company, Henkel. The program has been initially launched with suppliers in Algeria and will be expanded to include additional markets and suppliers in the coming months. 

The program is also a first for Henkel in IMEAT and is targeted at existing or new suppliers who demonstrate strong or improving sustainability performance. Qualifying suppliers can access Citi’s supply chain financing at preferential rates, improving as a supplier’s sustainability score improves. Henkel, with the support of a global leading sustainability assessment agency, will periodically assess the sustainability performance of its suppliers. 

Commenting on the collaboration, Bülent Pehlivan, Regional Head of Finance – India, Middle East and Africa said: “With sustainability being at the core of our company’s strategy, we are engaging in a range of activities with new ways of growing and innovative solutions to create value. We are delighted to collaborate with Citi Group to introduce a sustainable supply chain financing program for the first time in the region. Launching first in Algeria, we are committed to continue to implement it in other countries of the region in the near future.” 

Citi’s SSCF program in MENA aligns with the bank’s ESG commitments. To help accelerate the transition to a global low-carbon economy, Citi launched its updated Sustainable Progress Strategy in July of last year, which includes its global US$500 Billion Environmental Finance Goal. Citi also recently established a commitment to US$1 trillion in sustainable finance by 2030, which includes the environmental finance goal and a US$500 Billion Social Finance Goal. 

“We are proud to be collaborating with Henkel in this first SSCF program in the MENA region.  It is really pleasing to see that Henkel and Citi share a strategic focus on ESG.  At Citi we are looking forward to this partnership and journey with Henkel which will ensure that we continue to adapt and develop our ESG solutions even further”  said Dave Aldred. MENA Head, Treasury and Trade Solutions, Citi.

 “We are excited to be partnering with Henkel and helping them to achieve their sustainability goals via the launch of the first Sustainable Supply Chain Financing Program for Citi in the MENAPT region. Like Henkel, our ESG commitments are an essential part of our firm’s strategy and we are committed to provide innovative ESG-linked solutions to our clients and to expand the use of our Sustainable Supply Chain Financing Program in the region,” said Marcel Hanen, Citi Regional Head of the Global Subsidiaries Group – Middle East, North Africa, Pakistan and Turkey

 

About Henkel

Henkel AG & Co. KGaA is a German chemical and consumer goods company headquartered in Düsseldorf, Germany. It is a multinational company active both in the consumer and industrial sector. Founded in 1876, the DAX 30 company is organized into three globally operating business units (Laundry & Home Care, Beauty Care, Adhesive Technologies) and is known for brands such as Loctite, Persil,[2] Fa, Pritt, Dial and Purex, amongst others.

About Citi’s Treasury and Trade Solutions

Citi Treasury and Trade Solutions (TTS) enables our clients’ success by providing an integrated suite of innovative and tailored cash management and trade finance services to multinational corporations, financial institutions and public sector organizations across the globe. Based on the foundation of the industry’s largest proprietary network with banking licenses in over 90 countries and globally integrated technology platforms, TTS continues to lead the way in offering the industry’s most comprehensive range of digitally enabled treasury, trade and liquidity management solutions.

About Citi

Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://new.citi.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi 

Media Contact:
tara.sirinyan@citi.com  

Look out for these physical security trends in 2022

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Hassan El-Banna, Sr. Business Development Manager Middle East, Turkey & Africa (META) at Genetec gives us in AMEInfo, a Look out at these physical security trends in 2022.

Standardization of open and interoperable solutions across smart cities, faster hybrid cloud adoption, and a tighter focus on supply chain risks are some of the top physical security topics to keep an eye on

  • Organizations are employing spatial analytics data to cut wait times
  • Video analytics apps will be easier and more cost-effective to implement at scale
  • Smart city investments would reach $203 billion by 2024

The long-term impacts of the pandemic and other geopolitical events will generate new technical developments and considerations in 2022. Standardization of open and interoperable solutions across smart cities, faster hybrid cloud adoption, and a tighter focus on supply chain risks are some of the top physical security topics to keep an eye on.

Top physical security trends in 2022

Monitoring occupancy and space usage will continue to be a significant focus.

Occupancy tracking is still expanding nearly two years after the pandemic began, as businesses see value in the data collected. Organizations are employing spatial analytics data to cut wait times, manage staff scheduling, and improve company operations, in addition to safety goals.

Corporate organizations are also figuring out how to make their workplaces more efficient by splitting their work time between the office and home. The use of data on space utilization translates to increased operational efficiency, better resource management, and significant cost savings.

Large-scale deployments of video analytics will become more feasible.

Video analytics solutions have been in high demand in recent years. More companies are keen to invest as AI techniques such as machine learning, and deep learning continues to increase the power of analytics. However, complex video analytics still necessitate extremely powerful servers for appropriate data processing, making them impractical for large-scale adoption.

We predict that by 2022, video analytics apps will have matured to the point that they will be easier and more cost-effective to implement at scale.

Cybercrime will continue to evolve, requiring new approaches.

According to an analysis by Cybersecurity Ventures, global crime expenditures are expected to exceed $10.5 trillion annually by 2025. This is the most significant transfer of economic wealth in history, with a growth rate of 15% per year. According to the EMEA Physical Security in 2021 survey results, with the rise of work-from-home and the growing adoption of IoT, 48% of MEA respondents believed in the prioritization of the implementation of better business continuity plans. Against this backdrop, 67% of respondents planned to prioritize the improvement of their cybersecurity strategy in 2021. Cybersecurity concerns will continue to be a priority in 2022, with companies needing new approaches to face the growing cybercrime risks.

Businesses will need to be agile and sensitive to the expanding threat landscape as more devices come online and data processing becomes vital to operations. Customers want companies to keep their data safe and secure. Thus businesses must provide more openness. This will bring in a new cybersecurity model based on continuous verification rather than network and system hardening, alongside an increased focus on choosing partners who offer better degrees of automation.

The smart city movement will be aided by open architecture.

Smart city investments would reach $203 billion by 2024, according to a report titled IDC FutureScape: Worldwide Smart Cities and Communities 2021 Predictions. These smart towns are gathering massive amounts of data and seeking to improve urban safety and liveability. According to the IMD-SUTD Smart City Index 2021, the UAE ranks 29th amongst the world’s smart cities, with 78.5% of the respondents believing in the importance of data-driven physical safety procedures such as facial recognition as a part of necessary processes to improve law enforcement.

The ecology of the smart city also includes intelligent structures. Various businesses are attempting to evaluate data from different sensors and automate procedures. The problem is that this necessitates a shift away from proprietary solutions by cities and corporations. Human and data silos are inherently created by the closed-architecture concept, which stifles growth prospects.

By focusing on open and interoperable solutions, decision-makers will get the most out of their current technology investments by improving data sharing and collaboration. Longer-term, they’ll become more adaptable to changing requirements and more self-sufficient in data unification and ownership.

Adaptable access control technology will continue to be adopted by businesses.

Today’s businesses want more from their access control systems. They desire more flexibility in hardware choices, streamlined processes, and increased convenience for those who pass through their buildings daily.

Many businesses had to get innovative to comply with increased health and safety regulations during the pandemic. Regardless of where they are on the return-to-work spectrum, organizations today recognize that the new normal necessitates agility. This is why they’re investing in PIAM systems (physical identity access management).

Businesses may automate employee and guest access requests and remotely alter access rights for all employees using a self-service PIAM system, ensuring greater safety and compliance. Additionally, by combining access control and PIAM systems, onsite movement may be tracked, making it easier for businesses to spot possible COVID-19 transmission. We expect this trend toward more modern and adaptive access control systems to continue as the new year progresses.

Supply chain operations will receive more attention and emphasis.

Organizations are under pressure to evaluate their entire supply chain ecosystem as cyber threats get more sophisticated and global disruptions influence supply management everywhere. During the SolarWinds Attack, a flaw in its own IT resource management system exposed over 18,000 customers to malware, including Fortune 500 firms and US government agencies.

More enterprises and government agencies will widen the scope of their cybersecurity policies to create baseline security criteria for the products they acquire and the vendors they engage with, in a world where organizations no longer have clearly defined network perimeters.

Any supply chain issues in obtaining physical security equipment will encourage firms to become less reliant on proprietary solutions from a single provider. Should product availability, best practices, or lack of transparency for a specific vendor be questioned, decision-makers will be able to browse different vendor options and easily change out system components.

More businesses will migrate to the cloud and use a hybrid deployment model.

 The adoption of cloud computing is increasing. While many businesses aren’t ready to make the entire leap to the cloud, many are looking to the hybrid cloud deployment approach as a way to try out new apps.

As more physical security teams begin to experiment with cloud apps, the advantages of hybrid cloud will become clear. This will propel the use of cloud technology even further forward this year.

MENA region’s GDP to surge by over 3x by 2050

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MENA region’s GDP to surge by over 3x by 2050 according to Gulf Capital White Paper as reported by SME10X . In effect, the oil and gas trade revenues allow considerable financial power and a strategic position on the international scene for those exporting countries but also a source of vulnerability for their economies, especially in the aftermath of not only this recent COP26 but to also the ensuing COPs Let us nevertheless look at this prediction of this white paper.

MENA region’s GDP to surge by over 3x by 2050

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A New report quantifies unprecedented growth opportunities across “Ascending Asia” which is set to drive 40 percent of global consumption by 2040.

Gulf Capital has released a white paper, “Bridging West and East Asia: The Investment Case for Ascending Asia”, that outlines the significant future growth of the Asian economies and the growth in the intra-regional trade and investment flows between West Asia, including the GCC, and East Asia.

The study, jointly published by Gulf Capital and Dr Parag Khanna, Founder and Managing Partner of FutureMap, reveals that the MENA region is expected to increase its GDP by over 3x by 2050, the ASEAN region is expected to grow by 3.7x, and India by 5x. This turbo-charged growth is in sharp contrast to the projected slower growth of the European and US economies at only 1.5x and 1.8x respectively for the same period.

Within greater Asia, the GCC and Southeast Asia are two ascending regions with rising youth populations where demographic and technological shifts will generate a significant expansion of the services sectors. Across these societies, rising affluence and consumption will drive business expansion, corporate profits, and higher valuations. Longer-term reforms including capital account liberalization and accelerated privatization will unlock fresh investment inflows into new Asian listings.

Dr Karim El Solh, Co-Founder and Chief Executive Officer of Gulf Capital, said: “The unprecedented growth opportunities presented by the emergence of ‘Ascending Asia’ have never been greater. The strong macro-economic fundamentals, a growing middle class and youth population, increasing GDP per capita, rapid adoption of technology, and growing intra-regional trade and investment flows will only strengthen the case for the Asian economies. We are fortunate to be investing and operating across Ascending Asia from the GCC to the Near East and Southeast Asia, where we have acquired a large number of companies in the past.”

Additionally, East and West Asia’s deepening trade and investment networks indicate that capital, companies, and consumers will increasingly traverse the Indian Ocean and strengthen ties along the new Silk Roads, stitching the region into a whole greater than the sum of its parts.

El Solh concluded, “Against the backdrop of the evolving megatrends of deepening trade links, sizable FDI flows, greater political cooperation, and the fastest growing consumer sector, Gulf Capital is ideally poised to capitalize on this once in a generation cross-border opportunity. It is our firm belief that if investors want to capture rapid growth over the next three decades, they need significant exposure to the fastest growing industries across Ascending Asia.”

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Remarks by World Bank Group President David Malpass

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The World Bank at a time when according to the IMF, the MENA region is on track for a recovery, despite some rising social unrest threatening the ‘fragile’ progress of low-income economies, produced the following enthusiastic remarks by World Bank Group President David Malpass address to the Arab Governors of the World Bank Group.

Remarks by World Bank Group President David Malpass to the Arab Governors of the World Bank Group

Let me begin by congratulating Minister Khalil.  Your appointment as Minister of Finance comes at a crucial moment in Lebanon’s history. The World Bank Group will work with you to support the critical reforms needed to address Lebanon’s challenges.   Thank you for mentioning Hela in your opening.  She’s the new IFC Vice President for the region, and I want you all to know the high priority we place on private sector advancement in the region.  All parts of the World Bank Group are making that a high priority.

Dear Governors and distinguished guests, it is a pleasure to be with you again to discuss the challenges and opportunities in your region.  Thank you for your recent annual letter outlining the key and urgent development challenges of the region. Let me also thank our Dean Dr Merza Hassan for helping to convene this meeting and for his unwavering support to the MENA region.

We meet today against a backdrop of uncertainty. The COVID-19 pandemic has led to reversals in development gains in many regions, threatening jobs, social stability – and lives.

MENA was hit particularly hard by Covid 19. Even before the pandemic, growth had stalled, poverty was on the rise, and the social contract between citizens and the state was strained. Climate change adds a further burden to the development challenge.

During my recent visits to the region, to Sudan, Jordan and the Palestinian territories, I saw firsthand the impact of this multi-pronged crisis. I was concerned by low investment levels, high unemployment rates, and low female labor participation rates.

I also saw potential via regional integration, pro-growth investment, and improvements in the enabling environment for business. The recovery in global growth provides opportunities to make positive changes, and I was encouraged by my discussions with officials and businesses.

As you know, MENA is the least economically integrated region in the world. We have expressed our support for any initiative aimed at developing economic ties between countries in the region, and we are thus looking at ways to support the gas and electricity potential connection between Egypt, Jordan and Lebanon.

While we are not in a position to engage in Syria, we nevertheless are concerned about the Syrian people’s economic woes due to the degradation of the situation in the country. Our position has always been to look after the people, and we are doing so for Syrian refugees in Lebanon and Jordan.

In the year leading up to the next annual meetings in Marrakesh, my message will remain focused on the importance of improving access to vaccines; recovering from Covid; overcoming conflict; mitigating and adapting to climate change; containing debt; and creating strong sustainable jobs for the youth of this region.

Morocco has made progress on all of these, and I want to thank you for graciously hosting us in 2022.

As a region, MENA will need to generate 300 million new jobs by 2050. These will be created largely by the private – not public – sector.  Reaching this critical goal of sustainable job creation needs governance and transparency, rule of law, and an attractive business environment.

IBRD, IFC and MIGA are fully engaged. I’m interested in hearing from you where the World Bank Group can position itself better.

As we move toward Marrakesh in 2022 and Cop27 in Egypt, how can the Bank Group assist in making these events a launching pad for more sustained and comprehensive development in MENA?

Thank you again for inviting me and let’s now open our discussion.

To address inequalities we need a new vision for trade

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Usman Ahmed, Senior Director; Head, Global Public Policy and Research, PayPal with Aditi Sara Verghese, Policy Analyst, International Trade and Investment, World Economic Forum Geneva elaborate in This article as part of the Sustainable Development Impact Summit, on how in order To address inequalities we need a new vision for trade.

The above Image is of Etienne Girardet on Unsplash

To address inequalities we need a new vision for trade

21 Sep 2021

  • A new vision for the global trading system must encompass equitable access to the benefits of trade for all of society, and some nations have signalled support in this regard.
  • Reforms to trade policy could have a meaningful impact on domestic economic inequality if a range of concrete steps are taken.
  • The WTO, and trade policy and practice more generally, can be reframed to reflect the notion of economic justice, and the time to make this shift is now.

Divides and discrimination within countries along the lines of race, ethnicity, gender and Indigenous identity have resulted in longstanding social, economic and political challenges. The COVID-19 pandemic has further laid bare the stark inequalities among societal groups.

Yet resistance and restorative action have spread too. Social movements for racial justice in the United States have inspired similar initiatives in other countries. The #MeToo movement spotlighted sexual abuse and harassment and catalysed broader conversations about women’s participation in economic, social and political life. Meanwhile, some governments are coming to terms with their historical and current treatment of Indigenous peoples.

In this context, a new vision for the global trading system must encompass equitable access to the benefits of trade for all sections of society. This is an important aspect of building support for trade, as emerging research indicates that minority groups are often either negatively affected by trade shocks or do not have equitable access to the opportunities it provides.

Some countries have signalled support in this regard. For the first time, the US’s trade agenda includes the goal of racial equity. Canada, Chile and New Zealand signed a Global Trade and Gender Arrangement in August 2020. The relationship between trade and the rights of Indigenous peoples has been increasingly recognized in international economic agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Canada-United States-Mexico Agreement (CUSMA).

Image: Usman Ahmed and Aditi Sara Verghese (2021)

Understanding the problem

The effect of trade on inequalities between countries is well covered in economic literature. Differential trade impacts within countries among different income groups, between small and large firms, and on labour is well studied and discussed.

The effects of trade on different societal groups within countries – whether based on race, ethnicity, nationality, Indigenous identity or gender – has received less attention. This may be because domestic policies are considered the most direct way to tackle these inequalities. However, trade constitutes 58% of global GDP and is an important aspect of economic empowerment. And, while domestic policies can help with inequities created by trade if properly designed, reforms to trade policy could also have a meaningful impact on domestic economic inequality if a range of concrete steps are taken.

Developing and implementing inclusive policy

Better policymaking begins with better data. Governments should understand the industries that underserved populations are most likely to own and work in or rely on for inputs and final products. For instance, in 2016, minority-owned businesses represented 19% of US firms, but only 12.8% of US manufacturing firms. Governments should examine tariff lines to determine if they are discriminatory against those sectors that have a disproportionate representation of minority businesses and workers.

Underrepresented groups must be actively invited to participate in developing trade policy and negotiating positions. The advantages of such engagement were apparent in the provisions for Indigenous peoples in Canada’s trade agreements, for instance. New Zealand has carved out exceptions in their agreements to respect commitments made to Māori.

Trade agreements can also improve labour standards and remove discrimination against minority, migrant and female workers through labour chapters. These should include commitments by advanced economies to support and build capacity for the implementation of the necessary domestic reforms by trading partners.

Technical assistance and capacity building efforts that often accompany trade agreements must take into account equity considerations. Organizations should actively measure impacts of their initiatives on women and minority groups.

Inclusive trade in practice

Businesses also have an important role to play in enabling inclusive trade. Many have stepped up to publicly support movements for minority rights and inclusion. Investments in minority businesses can help raise the overall wellbeing of underserved communities. Supplier diversity programmes can support women-owned, minority-owned and Indigenous businesses to meet procurement standards, access financing and comply with export and import requirements.

Access to trade finance for micro-, small- and medium-sized enterprises (MSMEs) could result in major gains for those underrepresented groups and for the broader economy. The IFC estimates that 70% of women-owned formal MSMEs in developing countries are unserved (or underserved) by financial institutions, with an estimated funding gap of $285 billion.

New technologies and digitalization can also make trade more inclusive – whether by enabling MSMEs to connect and transact with international buyers, providing natural language processing for translation, or automating trade processes that might otherwise lend themselves to discriminatory practices.

Public-private partnership for economic inclusion

Active engagement by all stakeholders at all stages of the process – from research, consultation and policy development to implementation and capacity-building – will be essential in realising a truly inclusive approach to trade.

Businesses and civil society organizations have an opportunity to voice support for government action through the World Trade Organization on these issues in the runup to the 12th Ministerial Conference. Moreover, governments can work with the private sector and civil society organizations to create programs like trade finance guarantees targeting underserved populations.

What is the World Economic Forum’s Sustainable Development Impact summit?

It’s an annual meeting featuring top examples of public-private cooperation and Fourth Industrial Revolution technologies being used to develop the sustainable development agenda.

It runs alongside the United Nations General Assembly, which this year features a one-day climate summit. This is timely given rising public fears – and citizen action – over weather conditions, pollution, ocean health and dwindling wildlife. It also reflects the understanding of the growing business case for action.

The UN’s Strategic Development Goals and the Paris Agreement provide the architecture for resolving many of these challenges. But to achieve this, we need to change the patterns of production, operation and consumption.

The World Economic Forum’s work is key, with the summit offering the opportunity to debate, discuss and engage on these issues at a global policy level.

International trade has done yeoman’s work in lifting millions out of poverty, driving economic growth and encouraging economic integration that reduced incentives for armed conflict between nations. There are green shoots that make the current moment an ideal time for trade to address domestic socio-economic divides.

We believe that the World Trade Organization, and trade policy and practice more generally, can be reframed to reflect the notion of economic justice and that the time to make this shift is now.

Read the Global Future Council on Trade and Investment paper on “International Trade and Economic Justice” here.

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