Ghana International Bank has secured a US$50 million trade finance facility, supported by British International Investment, aimed at enhancing intra-Africa commerce in sub-Saharan countries. The financing will target Sierra Leone, Liberia, The Gambia, Benin, Democratic Republic of Congo, Rwanda, and Tanzania, facilitating essential trade flows and addressing credit gaps in these markets.
Ghana International Bank (GHIB) has initiated a trade finance facility valued at US$50 million, aimed at enhancing intra-Africa commerce among several sub-Saharan countries. The countries included in this funding package are Sierra Leone, Liberia, The Gambia, Benin, Democratic Republic of Congo, Rwanda, and Tanzania. This initiative is supported by the British International Investment (BII), which is the UK’s development finance institution.
The Master Risk Participation Agreement (MPRA) will enable GHIB to provide support to a larger number of businesses and facilitate trade flows in selected areas. This initiative is crucial, as there is a noted reluctance to extend credit in frontier markets due to heightened risk perception and lower transaction volumes. “At GHIB, we believe our success over the last 65 years is rooted in a deep understanding of African risk,” stated Dean Adansi, CEO of GHIB.
Adansi emphasized that this collaboration with BII offers a productive avenue to establish partnerships that effectively utilize their comprehensive understanding of risk to create profitable and impactful transactions. Furthermore, the increase in trade finance will empower local enterprises to import essential commodities and equipment required for their sustained growth.
The partnership is designed to take advantage of GHIB’s extensive network and proven experience in trade finance while also allowing BII to participate in bridging the considerable trade finance gap present in African markets today, especially in light of the challenging economic environment.
BII’s participation provides crucial foreign exchange dollar liquidity necessary for the importation of vital goods into GHIB’s operating regions. According to Adansi, “With this deal, we are employing a structure that uses our deep knowledge and access to the market, harnessed together with the superior scale and capacity of BII.” Together, they aim to facilitate significant opportunities in emerging markets that lead to real GDP growth. Research indicates that each dollar of trade generates approximately US$1.3 in GDP for those markets.
Kwabena Asante-Poku, BII’s country director for Ghana, remarked on the recent economic challenges faced by many African countries and their adverse effects on growth. “Trade remains a key driver of growth for African economies, especially in frontier markets like Sierra Leone, Liberia, and The Gambia. Enhancing the flow of trade credit… will ensure access to essential goods and services, which in turn drives sustainable and inclusive economic growth,” Asante-Poku articulated.
The Ghana International Bank’s trade finance initiative, valued at US$50 million, represents a significant step towards enhancing intra-Africa trade, particularly within sub-Saharan markets. By collaborating with the British International Investment, GHIB aims to address the critical credit gaps in these markets and facilitate vital trade flows, enabling business growth. This partnership underscores the importance of trade as a catalyst for economic growth in Africa, particularly in response to challenging economic conditions.
Original Source: africanreview.com
