The UK’s development finance institution, British International Investment (BII), has partnered with Ghana International Bank (GHIB) to boost trade in seven African countries.
- British International Investment (BII) partners with Ghana International Bank (GHIB) to boost trade in seven African countries
- The $50 million deal aims to increase access to finance for local businesses in seven African countries.
- The partnership addresses the lack of credit appetite for frontier markets in Africa and aims to fill the significant trade financing gap
The $50 million trade deal led by BII aims to increase access to finance for local businesses in the African countries which include Sierra Leone, Liberia, The Gambia, Benin, DR Congo, Rwanda, and Tanzania.
Through this partnership, GHIB will lend to businesses through local banks, helping them import essential commodities and equipment to scale their operations and increase trade.
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This initiative is expected to create jobs and drive economic growth through the “multiplier effect”.
Details of the trade deal
According to the British International Investment, BII, the $50 million facility, which will be facilitated under a Master Risk Participation Agreement (MPRA), will enable GHIB to support more businesses and facilitate trade flows in the target countries.
The deal will address the general lack of credit appetite for frontier markets in Africa for reasons including high-risk perception and comparatively lower volumes.
Increased trade finance empowers local businesses to import vital commodities and equipment, driving growth, sustainability, and economic opportunities.
This, in turn, ensures a steady supply of essential goods at affordable prices, promoting market stability and economic resilience across Africa.
Speaking, BII’s country director for Ghana, Kwabena Asante-Poku, emphasized that the partnership aims to deploy capital for the “biggest impact” by supporting local businesses in frontier markets.
GHIB CEO Dean Adansi added that the partnership will help address Africa’s significant trade financing gap, which is estimated to be between $90 billion and $120 billion annually.
He emphasized the institution’s deep understanding of African risk as a key driver of its success over the past 65 years.
He highlighted the partnership with British International Investment as a strategic avenue to leverage this expertise into impactful and profitable transactions.
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“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 of the market, harnessed together with the superior scale and capacity of BII.” Adansi noted
Citing research, he pointed out that each dollar of trade generates approximately $1.3 in GDP, underscoring the deal’s potential to enhance liquidity and economic expansion.
