The United Kingdom Development Finance Institution and Impact Investor, has recently announced a $50m trade finance facility covering Sierra Leone and six other African nations under a Master Risk Participation Agreement (MRPA).
The $50 million facility will enable Ghana International Bank (GIB) plcto support more businesses and facilitate trade flows in the targeted countries and also address the general lack of credit appetite for frontier markets in Africa for reasons including high risk perception and comparatively lower volumes.
The collaboration leverages (GHIB) extensive network and proven track record in trade finance and allows British International Investment(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 GIB’s operating markets.
Increased trade finance can enable local businesses to import the commodities and equipment they 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.
After the announcement,Country Director for Ghana at BII, Kwabena Asante-Poku,said: “In recent years, many African countries have faced challenging economic conditions 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. We are pleased to partner with GHIB to offer practical trade finance solutions to businesses in countries facing difficulties in accessing finance for imports and exports.”
The UK’s Minister for Africa, Lord Collins of Highbury, commented: “I’m delighted to see two UK institutions coming together to strengthen economic ties with Africa. Africa’s trade financing gap is one of the continent’s most pressing challenges and access to this funding will 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.” The partnership was announced during a signing ceremony in London.
