A report published by the Bank of Ghana (BoG) has revealed that exporters are receiving only a pittance from banks, in terms of credit, despite calls to provide financial support for businesses in export trade, especially in the era of African Continental Free Trade Agreement (AfCFTA).
According to the Statistical Bulletin Report, out of more than GHC50 billion that banks gave out as credit to various sectors of the economy, as of November 2019, only GHC344 million went to export trade – representing just 0.6 per cent of total credit.
However, import trade on the other hand received five times more (GHC1.9billion) than the support given export trade.
This made the sector the least supported, in terms of banks’ credit, in the economy. This is seen as a major cause for worry, considering the fact that the AfCFTA will come into force mid-year, and exporters are expected to be the main drivers of this trade deal.
Experts say, with Ghana as host of the secretariat for a trading bloc that is expected to create a US$3 trillion market, it will be sad if businesses are not able to capitalise on this advantage primarily because banks are not ready to provide the needed financial support.
Calls for resources
It would be recalled that the chief executive of the Ghana Export Promotion Authority (GEPA), Afua Asabea Asare, recently emphasised the need for structural reforms to be implemented so that businesses can add value to products and drive industrialisation in order to make the AfCFTA dream a reality.
The country director of the World Bank, Pierre Frank Laporte, also said the AfCFTA is one of the best things to ever happen on the continent, hence all efforts must be put in to deepen trade within the region.
Meanwhile, the country director of Invest in Africa, Clarence Nartey, has also told journalists in Accra that “it is our surest path to higher value rungs on Global Value Chains.”
“Let me be brutally honest: come June 2020, firms in globally competitive countries like South Africa, Rwanda, Ethiopia and Kenya, with experience in regional value chains, will seize the opportunity and march across Africa. It is important that local businesses start getting ourselves ready or risk being side-lined or swallowed-up,” she added.