The UK's development finance institution, British International Investment (BII), has partnered with Ghana International Bank (GHIB) to secure a $50 million trade deal aimed at increasing access to finance for local businesses in seven African countries. The deal is expected to create jobs and drive economic growth through the "multiplier effect" in Sierra Leone, Liberia, The Gambia, Benin, DR Congo, Rwanda, and Tanzania.

The partnership addresses the lack of credit appetite for frontier markets in Africa, which is attributed to high-risk perception and comparatively lower volumes. 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. This initiative is expected to create jobs and drive economic growth through the "multiplier effect."

The $50 million facility, facilitated under a Master Risk Participation Agreement (MPRA), will enable GHIB to support more businesses and facilitate trade flows in the target countries. According to BII's country director for Ghana, Kwabena Asante-Poku, the partnership aims to deploy capital for the "biggest impact" by supporting local businesses in frontier markets.

GHIB CEO Dean Adansi emphasized 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 highlighted the institution's deep understanding of African risk as a key driver of its success over the past 65 years. The partnership with British International Investment represents a strategic avenue to leverage this expertise into impactful and profitable transactions.

Adansi noted that the partnership will employ a structure that uses GHIB's deep knowledge and access to the market, harnessed together with the superior scale and capacity of BII. 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.

This initiative is expected to have a significant impact on the economies of the seven African countries involved. By increasing access to finance for local businesses, the partnership aims to promote market stability and economic resilience across Africa. The deal is a positive step towards bridging the significant trade financing gap in the region, and its success could pave the way for similar initiatives in the future.

In conclusion, the $50 million trade deal secured by British International Investment and Ghana International Bank is a significant development for the seven African countries involved. The partnership's focus on supporting local businesses and increasing access to finance is expected to drive economic growth and create jobs, ultimately contributing to a more stable and resilient economic environment in Africa.