BII and Ghana International Bank Forge $50 Million Partnership to…

British International Investment and Ghana International Bank have established a $50 million partnership to enhance trade finance in West Africa. The initiative aims to facilitate the import of essential goods and services for local businesses in several countries, addressing the significant trade finance gap in the continent. The collaboration is expected to improve liquidity and economic growth across the region.

The British International Investment (BII) and Ghana International Bank (GHIB) have entered into a significant partnership worth $50 million aimed at enhancing trade finance across West Africa. This collaboration will specifically target the flow of essential goods and services to businesses in countries such as Sierra Leone, Liberia, The Gambia, Benin, the Democratic Republic of the Congo, Rwanda, and Tanzania, thereby fostering economic development in the region.

The initiative will empower GHIB to provide local firms with the necessary funds for importing vital commodities and equipment as well as support exports. It seeks to mitigate the reluctance of conventional lenders to extend credit to frontier markets in Africa due to perceived risks and lower lending volumes. Dean Adansi, CEO of GHIB, emphasized the importance of this agreement for increasing liquidity in the market.

The African Development Bank (AfDB) estimates that the continent faces an annual trade finance deficit of approximately $81.8 billion, significantly impacting small and medium-sized enterprises, which play a crucial role in Africa’s economic landscape. Research conducted by GHIB indicates that every dollar of trade can generate an economic return of approximately $1.30 in the West African markets where it operates.

Kwabena Asante-Poku, BII’s Country Director for Ghana, underscored the significance of trade in driving growth within African economies, especially in frontier markets such as Sierra Leone, Liberia, and The Gambia. He remarked that improving access to trade credit and financial services will facilitate the procurement of essential goods and consequently stimulate sustainable economic growth. Furthermore, UK Minister for Africa, Ray Collins, highlighted that addressing Africa’s trade financing gap is imperative, asserting that better access to funding will enable local businesses to engage more effectively in global trade, including with the UK.

The partnership between BII and GHIB represents a strategic effort to bridge the trade finance gap in Africa. By enabling increased liquidity and accessibility to essential goods, this initiative seeks to bolster economic growth in West African nations. As underscored by various stakeholders, addressing the financing deficit is critical for fostering sustainable development and enhancing trade relations both regionally and globally.

Original Source: impact-investor.com