Ghana International Bank Initiates US$50 Million Trade Finance for Africa

Ghana International Bank has signed a US$50 million trade finance deal with British International Investment to improve intra-Africa trade in several sub-Saharan countries. This partnership aims to support businesses and address the credit gap in frontier markets by enhancing access to essential commodities and facilitating economic growth.

Ghana International Bank (GHIB) has entered into a notable trade finance agreement valued at US$50 million to enhance intra-Africa trade across several sub-Saharan nations, including Sierra Leone, Liberia, The Gambia, Benin, the Democratic Republic of Congo, Rwanda, and Tanzania. This funding initiative is supported by British International Investment (BII), which serves as the UK’s development finance institution, aiming to aid economic growth in these regions.

Through a Master Risk Participation Agreement (MPRA), this funding package will empower GHIB to assist a greater number of businesses and facilitate seamless trade transactions in the targeted countries. This initiative directly addresses the prevailing reluctance to extend credit within frontier markets of Africa, largely attributed to heightened risks and relatively lower trade volumes.

Dean Adansi, CEO of GHIB, emphasized the bank’s long-standing expertise, stating, “At GHIB, we believe our success over the last 65 years is rooted in a deep understanding of African risk.” He added that the partnership with BII presents a strategic avenue to leverage their risk knowledge into meaningful and profitable transactions.

Enhancing trade finance is expected to enable local businesses to import essential commodities and machinery, thereby aiding their growth and sustainability. The partnership is designed to effectively use GHIB’s extensive network and established trade finance expertise, while also allowing BII to play a crucial role in bridging the widening trade finance gap in African markets during economically challenging times.

BII’s participation will provide essential foreign exchange liquidity, which is vital for importing crucial goods into GHIB’s operating markets. Dean Adansi stated, “With this deal, we are employing a structure that uses our deep knowledge and access to the market, harnessed with the superior scale and capacity of BII,” highlighting the collaborative efforts to promote opportunities in emerging markets.

Kwabena Asante-Poku, BII’s country director for Ghana, noted the adverse economic conditions many African nations have experienced recently. He stated, “Trade remains a key driver of growth for African economies especially in frontier markets like Sierra Leone, Liberia and The Gambia,” underscoring the importance of facilitating trade credit to ensure access to vital goods for sustainable and inclusive economic development.

In conclusion, the Ghana International Bank’s partnership with British International Investment marks a significant step towards enhancing trade finance within sub-Saharan Africa. By securing a US$50 million trade finance facility, GHIB aims to bridge the existing credit gap and bolster economic growth in various frontier markets. This initiative is expected to facilitate increased trade flows, thereby contributing to sustainable growth and enhancing access to essential goods and services.

Original Source: africanreview.com