Ghana International Bank plc (GHIB) and British International Investment (BII) have announced a groundbreaking $50 million trade finance facility aimed at bolstering businesses in several African nations, including Sierra Leone, Liberia, The Gambia, Benin, the Democratic Republic of Congo (DRC), Rwanda, and Tanzania. This initiative marks the first collaboration between these two UK-based institutions, reinforcing their shared commitment to addressing the persistent trade finance challenges faced by the African continent.
The trade finance facility has been established under a Master Risk Participation Agreement (MPRA), which is specifically designed to enhance credit availability in frontier markets where limited financial access often stifles economic growth. By facilitating trade flows, this facility will enable businesses in these regions to secure essential commodities and equipment, thereby fostering sustainable economic development.
Lord Collins of Highbury, the UK’s Minister for Africa, emphasized the importance of this partnership, stating, “I’m delighted to see two UK institutions collaborating to strengthen economic ties with Africa. Africa’s trade financing gap remains a major obstacle to growth, and access to this funding will empower local businesses to engage more actively in global trade, including with the UK.”
Kwabena Asante-Poku, BII’s Country Director for Ghana, highlighted the economic advantages of the agreement, noting that trade is a critical driver of growth, particularly in frontier markets. “Ensuring the availability of trade credit and financial intermediation will provide access to essential goods and services, promoting sustainable and inclusive economic progress,” he remarked.
Dean Adansi, Chief Executive Officer of GHIB, underscored the bank’s extensive expertise in African markets, describing the partnership as a strategic move to leverage its deep understanding of regional risks. “With this deal, we are combining our market insights with BII’s scale and capacity to enhance trade finance opportunities. Research indicates that every dollar of trade generates approximately $1.3 in GDP for these markets. We are committed to making this partnership a success, paving the way for further liquidity injections,” Adansi stated.
The collaboration between GHIB and BII is anticipated to play a crucial role in mitigating the trade finance shortfall in Africa by injecting essential foreign exchange liquidity. This influx of liquidity will facilitate the import of key goods, ensuring that businesses in these regions can maintain their operations and expand their market reach, even amid challenging economic conditions.
Overall, this landmark trade finance facility represents a significant step towards enhancing economic stability and growth in some of Africa’s most underserved markets, providing local businesses with the financial resources they need to thrive in the global marketplace.
