Ghana International Bank PLC signs $50m pact to boost cross-border trade

Ghana International Bank Plc (GHIB), a leading African financial institution based in the UK, and the British International Investment (BII), UK’s development finance institution and impact investor, have announced a $50-million trade finance facility.

The facility covers Sierra Leone, Liberia, The Gambia, Benin, the Democratic Republic of the Congo, Rwanda and Tanzania.

Under a Master Risk Participation Agreement (MPRA), the $50-million facility would enable GHIB to support more businesses and facilitate trade flows in the target countries.

It would also address the lack of credit appetite for frontier markets in Africa because of high-risk perception and comparatively lower volumes.

A joint statement issued by the two parties said increased trade finance would enable local businesses to import commodities and equipment they would need to sustain and grow their businesses.

“It helps create economic opportunities for business owners and maintain continued supply of essential goods in the market for Africans at a reasonable price,” the statement said. 

Economic ties

The UK’s Minister for Africa, Lord Collins of Highbury, said: “I am delighted to see two UK institutions coming together to strengthen economic ties with Africa.”

He said Africa's trade financing gap was one of the continent's most pressing challenges and added that access to the funding would enable local businesses to trade more with the world, including the UK.

“This partnership serves as another example of BII's leadership in building opportunities for growth with the UK's partners,” Mr Collins said.

The BII Country Director for Ghana, Kwabena Asante-Poku, said trade remained a key driver of growth for African economies, especially in frontier markets such as Sierra Leone, Liberia and

The Gambia, given that many African countries had faced challenging economic conditions in recent times that had impacted growth and livelihoods.

He said enhancing the flow of trade credit and financial intermediation to those markets would ensure access to essential goods and services which, in turn, would drive sustainable and inclusive economic growth. 

Impact

The Chief Executive Officer of GHIB, Dean Adansi, said the bank’s success over the last 65 years was rooted in a deep understanding of African risk.

“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.

“With this deal, we are employing a structure that uses our deep knowledge and access to the market, harnessed together with the superior scale and capacity of BII,” Mr Adansi said.

He said together, both companies were bringing support and expanding opportunities in those emerging markets to enable real Gross Domestic Product (GDP) growth.

“Our research indicates that each dollar of trade unlocks about $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,” Mr Adansi added.