Ghana International Bank has launched a $50 million trade finance facility to enhance intra-Africa business, supported by British International Investment. The facility targets key sub-Saharan markets and aims to overcome the challenges posed by high-risk perceptions in frontier markets. This initiative is expected to facilitate local firm imports, enhance trade credit access, and support GDP growth in those regions through improved financial intermediation.
Ghana International Bank (GHIB) has secured a trade finance facility worth $50 million aimed at enhancing intra-Africa trade across select sub-Saharan markets, including Sierra Leone, Liberia, The Gambia, Benin, Democratic Republic of Congo, Rwanda, and Tanzania. This funding initiative is supported by the British International Investment (BII), the UK’s development finance institution, under a structured agreement known as Master Risk Participation Agreement (MPRA).
This financial package is a response to the current limitations on credit accessibility in these frontier markets due to perceptions of high risk and lower transaction volumes. GHIB’s CEO, Dean Adansi, emphasized that over their 65 years of operation, the bank has cultivated a profound understanding of African risk factors, making this partnership with BII crucial for converting risk knowledge into profitable trade transactions.
The availability of increased trade finance is expected to assist local firms in importing essential commodities and equipment that are vital for their operational growth. This collaboration combines GHIB’s extensive network and proven expertise in trade finance with BII’s resources to address the widening trade finance gap prevalent in African economies amidst challenging conditions.
Furthermore, BII’s engagement introduces vital foreign exchange liquidity, which is essential for importing strategic goods into GHIB’s target markets. Adansi noted that the structure of this deal aims to expand opportunities in emerging markets, supporting real GDP growth and unlocking approximately $1.3 in GDP for every dollar of trade processed.
According to Kwabena Asante-Poku, BII’s country director for Ghana, recent economic difficulties have hindered growth and livelihoods across many African nations. He stated that trade is fundamental to economic growth in frontier markets and urged for improved financial intermediation to facilitate access to essential goods and services, thereby fostering sustainable and inclusive growth in these economies.
The $50 million trade finance facility by Ghana International Bank, backed by British International Investment, aims to improve intra-African trade and provide crucial liquidity for import activities in targeted sub-Saharan markets. This initiative not only showcases a deep understanding of African risk factors but also seeks to bridge the significant trade finance gap, ultimately driving economic growth and access to essential resources in emerging markets.
Original Source: africanreview.com
