Ghana is set to secure $1.7 billion in loans and support from the African Export-Import Bank (AFREXIM) to bolster its Small and Medium-Sized Enterprises (SMEs) and fund ongoing infrastructure projects.
This significant financial move aims to address key economic challenges and stimulate growth in various sectors.
The announcement was made by Abena Osei Asare, Minister of State at the Ministry of Finance, during the AFREXIM Annual Meetings and the Africaribbean Trade and Investment Forum held in Nassau, Bahamas. She highlighted the government’s strategic focus on innovative funding mechanisms to support SMEs, which are critical to Ghana’s economy.
SMEs in Ghana have long faced numerous challenges, including limited access to finance, inadequate infrastructure, and regulatory bottlenecks. The proposed funding from AFREXIM Bank is expected to alleviate some of these issues, providing a much-needed financial cushion for small businesses.
Minister Abena Osei Asare emphasized that the government is keen on exploring new ways to support these enterprises, which play a vital role in job creation and economic diversification.
“The President will next month launch the SME Growth and Opportunity Fund, and this support, if we can finalize it at this meeting, will help a lot going forward and the larger economy.”
Minister Abena Osei Asare
This fund is anticipated to provide tailored financial products and services to SMEs, fostering innovation and competitiveness within the sector.
Infrastructure Development
Meanwhile, a portion of the $1.7 billion will be allocated to ongoing infrastructure projects across the country. Infrastructure development is a cornerstone of Ghana’s economic strategy, aimed at enhancing connectivity, improving public services, and stimulating regional development.
By channeling funds into critical infrastructure, the government seeks to create a conducive environment for business operations and attract further investments.
“The government wants to assist SMEs in several sectors, and meetings like the AFREXIM Bank Annual Gathering offer us an opportunity to engage with other multilateral institutions and development partners.”
Minister Abena Osei Asare
This collaborative approach underscores Ghana’s commitment to leveraging international partnerships to drive domestic growth.
The African Export-Import Bank has been instrumental in supporting Ghana’s economic initiatives, particularly during challenging times.
In 2022, AFREXIM Bank extended $750 million to Ghana, aiding in capital growth-related expenditures at a time when the country faced difficulties securing funding from international markets due to debt restructuring negotiations.
This previous financial support was crucial in stabilizing Ghana’s economy, particularly in slowing the rate of currency depreciation in the latter half of 2022. Additionally, AFREXIM Bank has facilitated foreign exchange swap arrangements with local banks, providing essential liquidity for international trade.
Minister Abena Osei Asare reiterated Ghana’s commitment to working closely with AFREXIM Bank, highlighting the country’s role as a founding member and its active participation in the bank’s governance.
Ghana holds 3,645 Class “A” shares, representing 2.41% of the bank’s total shareholding through the Bank of Ghana. This strategic partnership is poised to yield significant benefits for Ghana’s economic recovery and long-term growth.
Recent Developments and Future Prospects
During the AFREXIM Bank Annual Meetings in Nassau, a notable development was the signing of a $50 million loan deal with Prime Meridian Docks. This agreement, witnessed by President Akufo-Addo, will finance the construction and operation of a world-class ship repair and maintenance facility in the port of Takoradi.
This project, under a 25-year concession granted by the Ghana Ports and Harbours Authority, is expected to create over 500 new jobs and boost the regional maritime economy.
The partnership between AFREXIM Bank and Ghana continues to evolve, with the bank’s support playing a pivotal role in various sectors. The upcoming SME Growth and Opportunity Fund, alongside ongoing infrastructure investments, reflects the government’s proactive stance in addressing economic challenges and harnessing growth opportunities.
Ghana’s quest for $1.7 billion from AFREXIM Bank underscores the country’s strategic efforts to empower SMEs and enhance infrastructure. This financial injection is poised to drive economic recovery, create jobs, and foster sustainable development.
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