Ghana International Bank (GHIB) has signed a trade finance facility worth US$50mn to boost intra-Africa business across a number of sub-Saharan markets
The funding package covers Sierra Leone, Liberia, The Gambia, Benin, Democratic Republic of Congo, Rwanda and Tanzania.
It is supported by British International Investment (BII), the UK’s development finance institution.
Under a Master Risk Participation Agreement (MPRA), the US$50mn package will enable GHIB to support more businesses and facilitate trade flows in the target countries.
It addresses the general lack of credit appetite for frontier markets in Africa for reasons including high risk perception and comparatively lower volumes.“
At GHIB we believe our success over the last 65 years is rooted in a deep understanding of African risk,” said Dean Adansi, GHIB’s CEO.
“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.”
Increased trade finance can also enable local firms to import the commodities and equipment they need to sustain and grow their businesses.
The collaboration leverages GHIB’s extensive network and track record in trade finance and allows BII to engage in a partnership that addresses the expanding trade finance gap in African markets, especially under challenging economic conditions.
BII’s involvement brings essential foreign exchange dollar liquidity, critical for the import of key goods to GHIB’s operating markets.
“With this deal, we are employing a structure that uses our deep knowledge and access of the market, harnessed together with the superior scale and capacity of BII,” said Adansi.
“Together, we are bringing this to support and expand opportunity in these emerging markets enabling real GDP growth. Our research indicates that each dollar of trade unlocks about US$1.3 into the GDP of our markets. We will work to make this deal a success, as it will open the way for more liquidity injections into the market.”
BII’s country director for Ghana, Kwabena Asante-Poku, said many African countries have faced challenging economic conditions in recent years that have impacted growth and livelihoods.
“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,” said Asante-Poku.
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Ghana International Bank to boost Africa trade
Ghana International Bank to boost intra-African trade. (Image source: Adobe Stock)
