Ghana International Bank has secured a $50 million trade finance facility to strengthen intra-Africa trade across several sub-Saharan markets, supported by British International Investment. This initiative addresses the credit limitations in frontier markets, facilitating increased trade flows and essential imports, while promoting economic growth in the region.
Ghana International Bank (GHIB) has initiated a trade finance facility worth $50 million aimed at enhancing intra-African commerce across various sub-Saharan nations. The financing will specifically target markets in Sierra Leone, Liberia, The Gambia, Benin, Democratic Republic of Congo, Rwanda, and Tanzania. This initiative is supported by British International Investment (BII), the United Kingdom’s development finance institution.
This package, structured under a Master Risk Participation Agreement (MPRA), is designed to facilitate trade flows and support businesses within the targeted countries. It addresses the prevalent lack of credit appetite in Africa’s frontier markets, a situation often exacerbated by heightened risk perceptions and lower transaction volumes. Dean Adansi, CEO of GHIB, emphasized the organization’s deep understanding of African risk as crucial to its enduring success over the past 65 years.
Adansi remarked, “This partnership with British International Investment represents a viable path through which we can structure partnerships that leverage this deep knowledge of risk into profitable and impactful transactions.” The increase in trade finance will also empower local firms to import the necessary commodities and equipment for their business growth.
This collaboration utilizes GHIB’s extensive network and experience in trade finance, while allowing BII to actively address the growing trade finance gap within African markets, particularly under economically challenging conditions. The involvement of BII is significant as it brings crucial foreign exchange liquidity, which is essential for the importation of key goods within GHIB’s operating regions.
Regarding the deal, Adansi stated, “Together, we are bringing this to support and expand opportunity in these emerging markets enabling real GDP growth.” GHIB’s research indicates that every dollar of trade has the potential to unlock approximately $1.3 into the GDP of the respective markets, underscoring the importance of successful deal execution in enhancing liquidity.
BII’s Country Director for Ghana, Kwabena Asante-Poku, noted the persistent economic challenges facing various African nations that have affected overall growth and livelihoods. 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 summary, Ghana International Bank’s partnership with British International Investment signifies a pivotal effort to enhance trade finance in sub-Saharan Africa. The $50 million trade finance facility aims to bridge the funding gap for frontier markets, facilitating the import of essential goods and stimulating economic growth. This collaboration highlights the critical role of trade in driving development and sustaining local businesses amid challenging economic landscapes.
Original Source: africanreview.com
