GHANA International Bank (GHIB) and British International Investment (BII) have launched a $50 million trade finance initiative aimed at boosting economic activity in seven African nations. The facility will help businesses in Sierra Leone, Liberia, The Gambia, Benin, the Democratic Republic of Congo, Rwanda, and Tanzania overcome long-standing credit constraints that have hindered trade and economic growth.
This initiative is expected to enhance cross-border trade by providing much-needed liquidity for businesses to import essential goods, invest in growth, and stabilise local economies. By addressing gaps in trade finance, the partnership aims to strengthen Africa’s role in global trade while supporting local job creation and economic expansion.
A strategic response to Africa’s trade finance gap
One of the most pressing challenges for businesses in Africa’s frontier markets is limited access to trade finance. Due to high risk perception and lower trade volumes, financial institutions often hesitate to extend credit to businesses in these economies. The collaboration between GHIB and BII directly addresses this issue by increasing the availability of financing, allowing companies to continue operations, expand, and invest in new opportunities.
Trade finance is particularly crucial in Africa, where small and medium-sized enterprises (SMEs) form the backbone of many economies but frequently struggle to secure capital. Without adequate funding, businesses are unable to import raw materials, leading to supply chain disruptions, price volatility, and stagnated economic growth. The $50 million facility aims to mitigate these risks by providing businesses with stable financial support to facilitate imports and exports.
Strengthening UK-Africa economic ties
The UK’s Minister for Africa, Lord Collins of Highbury, welcomed the initiative, emphasising its potential to deepen economic relations between the UK and Africa. ‘Africa’s trade financing gap is a major challenge that limits growth. This partnership between two UK institutions will allow African businesses to trade more with the world, including the UK, while creating new economic opportunities,’ he said.
The move aligns with the UK’s broader economic strategy in Africa, which focuses on boosting trade partnerships and supporting sustainable development. By enabling African businesses to participate more actively in global trade, the initiative could also create opportunities for UK firms looking to expand their supply chains and market reach.
A model for future trade finance solutions?
BII’s Country Director for Ghana, Kwabena Asante-Poku, stressed the importance of trade in driving economic recovery and growth in Africa. ‘Trade finance is a key driver of economic resilience, especially in frontier markets like Sierra Leone, Liberia, and The Gambia. By ensuring businesses can access credit, we are helping to build stronger, more sustainable economies,’ he said.
GHIB’s CEO, Dean Adansi, also highlighted the long-term impact of trade finance, citing research that suggests every dollar of trade unlocks approximately $1.30 in GDP growth for African markets. ‘This deal is more than just financial support—it’s about fostering real economic development. With BII’s scale and GHIB’s deep market knowledge, we are unlocking new opportunities for African businesses,’ he noted.
The partnership between GHIB and BII could serve as a blueprint for future trade finance collaborations in Africa. As economic challenges persist, especially with fluctuating global commodity prices and inflation concerns, innovative financial structures like this will be crucial in bridging the trade finance gap.
Moreover, this initiative may encourage other financial institutions to reconsider their approach to African markets. While risk perception has traditionally discouraged investment, structured trade finance solutions backed by experienced institutions like GHIB and BII demonstrate that there are viable pathways to unlocking Africa’s trade potential.
By addressing financial constraints, this partnership is not just facilitating trade—it is actively reshaping the economic landscape of Africa’s frontier markets, setting the stage for long-term sustainable growth.
