Ghana International Bank has secured a US$50 million trade finance facility, supported by British International Investment, to promote intra-Africa trade in several sub-Saharan countries. The agreement aims to enhance business opportunities, improve liquidity, and tackle the credit challenges faced by frontier markets, thereby facilitating economic growth in these regions.
Ghana International Bank (GHIB) has successfully negotiated a trade finance facility valued at US$50 million aimed at enhancing intra-Africa trade across various sub-Saharan regions. This funding will specifically support Sierra Leone, Liberia, The Gambia, Benin, the Democratic Republic of Congo, Rwanda, and Tanzania. The initiative is backed by British International Investment (BII), which is the UK’s development finance institution, further facilitating support for businesses within these targeted nations.
Under the Master Risk Participation Agreement (MPRA), the US$50 million facility will allow GHIB to provide assistance to more enterprises and foster trade flows in the identified countries. This initiative aims to tackle the prevalent issue of limited credit availability in frontier markets across Africa, which is often attributed to heightened risk perceptions and relatively lower transaction volumes.
Dean Adansi, Chief Executive Officer of GHIB, emphasized the bank’s substantial experience, stating, “At GHIB, we believe our success over the last 65 years is rooted in a deep understanding of African risk.” He highlighted that the collaboration with BII represents an effective strategy for forming partnerships that can convert this knowledge of risk into profitable and impactful transactions.
This boost in trade finance is expected to enable local businesses to procure essential commodities and equipment necessary for their growth and sustainability. The partnership leverages GHIB’s strong network and established history in trade finance while allowing BII to address the widening trade finance gap in African markets, particularly during challenging economic times.
BII’s participation is crucial, as it provides necessary foreign exchange dollar liquidity, which is vital for importing key goods to the markets where GHIB operates. Adansi reiterated the purpose of the deal, stating, “Together, we are bringing this to support and expand opportunity in these emerging markets enabling real GDP growth.”
Research conducted indicates that every dollar of trade can generate approximately US$1.3 in GDP for these markets. The success of this collaboration will not only enhance liquidity in the market but is also seen as a means of promoting inclusive economic growth.
Kwabena Asante-Poku, the country director for BII in Ghana, commented on the ongoing economic challenges faced by many African nations that have affected growth and livelihoods. He remarked, “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 will ensure access to essential goods and services, thereby fostering sustainable economic growth.”
The collaboration between Ghana International Bank and British International Investment facilitates significant trade finance support for several sub-Saharan African countries. This initiative not only addresses the capital gap in these markets but also aims to foster economic growth and development by enhancing local businesses’ access to essential goods and services. The partnership demonstrates a strategic approach to transforming perceptions of risk in frontier markets, contributing positively to the economies involved.
Original Source: africanreview.com