Afreximbank to rescue Ghana from Forex Challenge

The African Export-Import Bank (Afreximbank) has announced a proposal to introduce foreign exchange swap arrangements aimed at advancing the availability of foreign exchange to the Bank of Ghana (BoG) as part of a foreign exchange liquidity support for imports into Ghana.

The President Designate of the Bank, Dr. Benedict Oramah who made the announcement on Friday in Accra during a meeting with Seth Terkper, Ghana’s Minister of Finance, said that the initiative was part of a country assistance programme which Afreximbank was developing to help Ghana address the economic challenges it was facing as a result of the recent global financial crisis.

Dr. Oramah said that, as part of the country assistance programme, Afreximbank planned to support Ghanaian banks engaged in trade finance to meet temporary foreign exchange shortfalls with an initial investment of $200 million, expand lines of credit to Ghanaian Banks to enable them finance import of essential goods, including energy generation, and pursue the ongoing discussion with the Volta River Authority to provide it with additional funding of up to $300 million to enable it continue to pay for feed-stock imports and to clear arrears to local banks.

Afreximbank would also increase its support to Ghana under the Bank’s Export Development Programme, help the country enhance its trade supporting infrastructure, including power generation, and also help boost its service exports, particularly in tourism Sector, he added.

Dr. Oramah, who explained that the Bank’s decision to scale up intervention in the country was in recognition of the opportunities offered by the relatively stable socio-political and economic environment, stated that Afreximbank had approved credit facilities amounting to about $2 billion to the Ghanaian government, corporates and financial institutions since its inception in 1993.

The facilities included $150 million to the Volta River Authority to support capacity expansion and refurbishment activities; $70 million to a Ghanaian company to enable it offer mining and engineering services to international mining companies; $250 million to the Bank of Ghana to address short-term liquidity challenges; and $70 million to two Ghanaian-owned cocoa processing companies, he said.

Mr. Terkper welcomed the proposal by Afreximbank and said that the programme fit into the country’s economic strategies and plans.

He announced that the government had reached an advanced stage in the establishment of a Ghana Export-Import Bank and requested that Afreximbank support and contribute to the new entity.

The meeting is part of an ongoing engagement between Afreximbank and the Ghanaian authorities which has seen an Afreximbank team led by Dr. Oramah visit Ghanaian President John Mahama on 3 July and Ghanaian Vice-President Kwesi Bekoe Amissah-Arthur visit the Afreximbank Headquarters in Cairo on 5 August.

Dr. Oramah was accompanied on to the meeting by Kofi Adomakoh, Director of Afreximbank’s Project and Export Development Finance Department, Joy Albright of the Legal Department, and Remigius Nwachukwu of the Abuja Branch Office.