Remove constraints in order to improve trade with rest of the world – EU Delegation Head

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Photo: Ken Ofori Atta, Minister of Finance

Ghana has been advised to remove constraints like cost of energy and access to credit faced by manufacturers and exporters in order for the country to improve on its trade fortunes with the rest of the world.

Ambassador Diana Acconcia, Head of the European Union’s delegation to Ghana, who was speaking as a panelist at the recent FBNBank@25 National Trade Forum organised by FBNBank Ghana, hinted that the European Union’s support to Ghana may not achieve the desired impact in the face of constraints in the areas of energy and access to credit. According to her, “the European Union support can only do so much and the CEO of AGI has pointed out some of the constraints that are preventing Ghanaian companies from being competitive and I agree completely. There are issues like energy and there is the problem of access to capital.” She expressed her happiness to be present at such a forum organised by a bank, which to her is a positive indication.

She revealed that the issue is “something the European Union is looking at very closely in our future cooperation with Ghana. There will be components of support to the private sector and a part of it is also looking at access to capital. The idea behind it is that the investment many countries make, not only Ghana, but say Africa or the Middle East, is blocked by the fact that the private sector, both domestic and foreign, and the banks themselves have a high perception of risk particularly for small and medium enterprises.” She added that “together with the European development finance institutions, European Investment Bank and banks of the European member states, we are looking at how to de-risk investments in developing countries so that the full potential for investment for economic development can be unlocked.”

Ambassador Acconcia shared the willingness of the EU Delegation to engage FBNBank and other banks in Ghana on how to migrate some of the financial products being developed in Europe as a way of addressing the issue of access to credit. “Therefore, I would be very happy to be able to follow up with you, to get in touch, to discuss how we can work with your bank. We are doing it also with other banks, on how these financial products that are being developed in Europe can be used by the local banks as an incentive to lend more, particularly to small and medium-sized enterprises (SMEs),” she said.

On the issue of cost of energy, the Head of the EU Delegation said, “we are not only looking at that (access to credit), we are also looking at how to unlock investment in infrastructure, for example renewable energy, that apart from being beneficial for climate change, should also reduce the cost of energy in Ghana. This is something that we have started a couple of years ago, in fact in 2019. We had a business forum where we put some of the banks directly in contact with the companies established in Ghana and this work has been going on a little bit under the radar also because of COVID-19 but now it is going to be continued in full swing. We really need to see how we can address the constraints to investment, to competitiveness, to increase the production of exportable goods.”

She added that, “if you want to increase trade, you have to industrialise; if you want to industrialise, you have to invest, to invest, we have to address the barriers. This is the kind of reasoning we are doing, so we are moving from trade related assistance, we are moving from supporting the existing companies to become more competitive, we are moving towards increasing investment, increasing export offers and creating the basis for trade. Then we will have to continue to address the barriers to trade…”.

The FBNBank@25 National Trade Forum is a thought-leadership platform on trade initiated by FBNBank Ghana as part of the activities commemorating the Bank’s 25th anniversary. The first in the series featured five other panelists including Ambassador Gambo Yusuf Hamza, acting Nigerian High Commissioner to Ghana, Seth Twum-Akwaboah, Chief Executive Officer of the Association of Ghana Industries, Anthony Nyame-Baafi, Technical Advisor, Multilateral, Regional and Bilateral Trade, Ministry of Trade and Industries, Fechin Akoto, Officer-in-Charge, Tariff and Trade, Customs Division, Ghana Revenue Authority and the host, Victor Yaw Asante, Managing Director, FBNBank Ghana with George Wiafe of Multimedia Broadcasting as the Moderator.

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