As part of its commitment to supporting the Ghanaian economy, the German government, through the KfW Development Bank and Investing for Employment GmbH (IFE), in partnership with Stanbic Bank Ghana has announced an agreement to provide a €6million facility to support SMEs in the country.
The initiative is expected to benefit at least 40 SMEs which have been adversely impacted by the ongoing pandemic, with some 12,000 jobs projected to be preserved. This enterprise is another in the long line of cordial and fruitful developmental relations between entities in Ghana and Germany.
Ghana is a key partner for Germany in Africa. This has been evidenced by many interactions, including the addition of Ghana to the G20 initiative Compact with Africa and also by the conclusion of the bilateral Reform and Investment Partnership between both countries.
This was disclosed by Head of Cooperation at the Embassy of Germany in Ghana, Dorothee Dinkelaker, at virtual ceremony for the signing of the agreement.
“In light of the massive socio-economic impact of the COVID-19 pandemic, both on a global and domestic level in Ghana, quick and substantive measures are necessary to help preserve employment, production capacities and supply chain linkages,” she stated.
Additionally, she noted, “In Ghana, as in many other countries, most sectors of the economy have been affected by the coronavirus pandemic. Many informal workers have had their jobs negatively affected and even formal jobs are on the red line; projected revenues are falling, and employers are cash strapped.”
It is against this backdrop that the German government set up a Corona Response Program (CRP) as part of the Special Initiative on Training and Employment under which the German Federal Ministry for Economic Cooperation and Development offers a package of measures to support investment activities that have high impact on employment.
Director of KfW Office Ghana, Mr. Arndt Wierheim, suggested that the CRP marks the beginning of a strategic collaboration between KfW and Stanbic Bank Ghana. He stated that both banks share the common goal of financing SMEs which are strong, resourceful and innovative pillars of every economy.
He added that beyond the CRP, the German government via the KfW is partnering with the government of Ghana to deal with negative effects of COVID-19 in all 260 Metropolitan, Municipal and District Assemblies (MMDAs) in Ghana through the District Assembly Common Fund (DACF).
On his part, CEO of Stanbic Bank Ghana, Alhassan Andani revealed that the project was borne out of engagements with its partners on UN Sustainable Development Goals initiatives.
“In total we’ll be looking to support over 40 SMEs in a meaningful way to ensure that they primarily retain their employees, and that they can overcome the financial difficulties of COVID-19, maintain their businesses and hopefully grow the businesses but most importantly, hold on to critical staff. We believe this will affect 12,000 jobs. We’ve done the math with the group of SMEs well be working with,” he stressed.
He further disclosed that, “Stanbic has since the advent of COVID-19 put in place a number of measures to ensure that Ghanaian SMEs are supported throughout these difficult times. We have rescheduled loans, revised lending rates, restructured facilities to make payment more convenient for them, especially those in schools, hospitality, and other services that were severely impacted.”
Mr. Andani offered assurance that utmost transparency will be employed in the discharge of the funds to ensure the arrangement to benefits the intended target groups. He added that rigorous monitoring and evaluation would be carried out to guarantee the funds are used for the stated purposes as well as provide data-driven feedback to the financing partners.