The Ghana International Bank has launched a US$50 million trade finance facility to promote intra-African trade in sub-Saharan countries, supported by British International Investment. This partnership aims to address credit accessibility challenges in frontier markets and enhance local businesses’ ability to import vital commodities for growth, thus fostering economic development.
Ghana International Bank (GHIB) has initiated a significant trade finance facility valued at US$50 million, aimed at enhancing intra-African commerce within several sub-Saharan nations. This funding encompasses countries such as Sierra Leone, Liberia, The Gambia, Benin, the Democratic Republic of Congo, Rwanda, and Tanzania. The initiative receives backing from British International Investment (BII), the UK’s development finance institution.
Through a Master Risk Participation Agreement (MPRA), the US$50 million funding will empower GHIB to assist a greater number of businesses and promote trade flows in the specified regions. This venture seeks to counter the prevalent reluctance to lend to frontier markets in Africa, stemming from concerns regarding high-risk perceptions and lower transaction volumes.
Dean Adansi, the CEO of GHIB, emphasized the significance of the bank’s deep understanding of African risks, stating that, “At GHIB we believe our success over the last 65 years is rooted in a deep understanding of African risk.” He further articulated that this collaboration with BII creates opportunities for impactful transactions by leveraging this expertise.
The increase in trade finance will facilitate local businesses in importing necessary commodities and equipment, crucial for their sustainability and growth. Additionally, this partnership will harness GHIB’s extensive trade finance network while allowing BII to contribute to bridging the burgeoning trade finance gap amidst challenging economic landscapes.
BII’s participation provides vital foreign exchange dollar liquidity, essential for importing significant goods into GHIB’s operational markets. Adansi remarked, “With this deal, we are employing a structure that uses our deep knowledge and access of the market, harnessed together with the superior scale and capacity of BII,” promoting substantial economic growth.
Kwabena Asante-Poku, BII’s country director for Ghana, noted that many African nations have faced economic hardships recently affecting growth. He stated, “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 and financial intermediation to these markets will ensure access to essential goods and services which in turn drives sustainable and inclusive economic growth.”
In conclusion, Ghana International Bank’s establishment of a US$50 million trade finance facility, supported by British International Investment, represents a strategic initiative to enhance commerce in Africa. By addressing the financing challenges faced by frontier markets, this collaboration seeks to stimulate economic growth and facilitate essential imports for local businesses, ultimately driving prosperity across several sub-Saharan countries.
Original Source: africanreview.com
