The British International Investment and Ghana International Bank have launched a $50 million partnership to improve trade finance in West Africa, focusing on enhancing foreign exchange liquidity and supporting local businesses in essential goods importation. This initiative aims to address the overall trade finance deficit in the region and drive sustainable economic growth.
British International Investment (BII) and Ghana International Bank (GHIB) have entered into a $50 million partnership to improve trade finance and facilitate the flow of essential goods across West Africa. This collaboration seeks to enhance foreign exchange liquidity, which is critical for the importation of vital commodities in countries such as Sierra Leone, Liberia, The Gambia, Benin, DRC, Rwanda, and Tanzania.
The partnership will empower GHIB to provide financial support to local businesses, enabling them to import necessary equipment and commodities as well as to export products. This initiative aims to address the reluctance of traditional lenders to extend credit to frontier markets in Africa, which are often viewed as high-risk environments with lower transaction volumes.
Dean Adansi, CEO of GHIB, expressed optimism about the partnership, stating the commitment to make it a success, which is expected to lead to further liquidity in the market. The African Development Bank estimates an annual trade finance deficit of approximately $81.8 billion in Africa, which disproportionately affects small and medium-sized enterprises vital to the continent’s economies.
Research conducted by GHIB indicated that each dollar of trade can generate about $1.30 for West African economies. Kwabena Asante-Poku, BII’s country director for Ghana, emphasized the importance of trade as a growth driver for African markets. He noted that enhancing trade credit access will run parallel with sustainable and inclusive economic development.
UK Africa Minister Ray Collins referred to Africa’s trade financing gap as one of the continent’s most significant challenges. He highlighted that improved access to trade financing would enable local businesses to engage more extensively with global markets, including the UK.
The collaboration between BII and GHIB marks a significant step towards closing the trade finance gap in Africa, facilitating liquidity and enhancing access to essential goods for businesses in West Africa. By supporting local enterprises, this partnership not only fosters economic growth but also addresses the systemic challenges faced by frontier markets. The acknowledgment of trade as a pivotal growth driver underscores the potential impact of this initiative on sustainable development in the region.
Original Source: impact-investor.com
