British International Investment (BII) and Ghana International Bank (GHIB) have partnered for $50 million to enhance foreign exchange liquidity in West Africa. This initiative aims to facilitate the import of essential goods for businesses in Sierra Leone, Liberia, The Gambia, Benin, DRC, Rwanda, and Tanzania. The agreement addresses the trade finance gap impacting small and medium-sized enterprises and seeks to stimulate economic growth in these markets.
British International Investment (BII) and Ghana International Bank (GHIB) have embarked on a strategic $50 million partnership aimed at enhancing foreign exchange liquidity in West African nations. This initiative is crucial for the importation of essential goods and services within the regions of Sierra Leone, Liberia, The Gambia, Benin, the Democratic Republic of the Congo, Rwanda, and Tanzania.
The newly established $50 million trade facility will empower GHIB to facilitate the importation of necessary commodities and equipment for local businesses, thereby fostering their growth. This initiative also seeks to counter the reluctance of traditional lenders to extend credit to frontier markets in Africa, attributed to perceived high risks and lower transaction volumes.
According to Dean Adansi, CEO of GHIB, the partnership aims to “open the way for more liquidity injections into the market.” The African Development Bank (AfDB) estimates that the continent faces an annual trade finance gap of approximately $81.8 billion, significantly impacting small and medium-sized enterprises that are vital for economic stability and growth.
Research conducted by GHIB indicates that for every dollar of trade, approximately $1.30 is generated within the West African economies it serves. Kwabena Asante-Poku, BII’s country director for Ghana, emphasized that trade is a fundamental growth driver, particularly in frontier markets such as Sierra Leone and Liberia. By enhancing trade credit flow and financial intermediation, essential goods and services can be better accessed, fostering sustainable economic growth.
UK Minister for Africa, Ray Collins, acknowledged the funding’s potential, stating that addressing Africa’s trade financing gap is critical for enabling local businesses to engage more effectively in global trade, including with the UK.
The $50 million partnership between British International Investment and Ghana International Bank is poised to significantly impact trade finance in West Africa. By focusing on liquidity and supporting local businesses, this initiative aims to alleviate the existing trade finance deficit, thus driving sustainable growth in the region’s key markets and facilitating greater participation in global commerce.
Original Source: impact-investor.com
