Ghana as a major commodity export and trading country needs to further place much premium on trade finance to speed up economic growth, Mark Arthur, Senior Manager, Ghana International Bank has said.
He said trade finance was very critical in the development of all nations including Ghana hence the need to pay more attention to it.
Mr. Arthur said that almost every country that had successfully traveled the path of export-led growth placed a lot of priority on ensuring that appropriate structures and schemes that would enable them to provide specialised and custom-designed financial services for exporters and importers were properly put in place.
“One of the most important challenges for traders involved in a transaction is to secure financing so that the transaction may actually take place. The faster and easier the process of financing an international transaction, the more trade will be facilitated. Trade finance therefore provides companies with the necessary capital and liquidity and helps them to better manage their cash flow, allowing them to expand and grow,” he said.
Speaking at the opening of a four-day seminar on trade finance organised by the bank he said every trade transaction must be financed adding that the non-availability of trade finance may therefore become an obstacle to international trade that impedes sustainable development.
He said Ghana a traditionally trading country had not been doing badly in the area of trade finance but doing more would further enhance the country’s development.
“To be part of the global village, trade finance is very important and needed to be given much attention. ICB has rich experience in trade finance and we want to share it with participants,” Mr. Arthur said.
He said, “As Ghana trades, more and more goods and commodities are bought and sold, and so, more and more banks and financiers are needed to lend money to finance the purchase and sale of these goods and commodities, right across the global supply chain.”
He said countries that have a breakthrough in trade finance export credit agencies or export import banks were established as development institutions to provide the needed support to the trade sector.
“As international trade is one of the most important driving forces for economic development in developing countries and emerging markets, the availability of trade financing is extremely important for sustainable development,” he said.
In particular, he said the integration of small and medium-sized enterprises (SMEs) into international trade is essential for emerging markets and developing countries and promotes economic development in an especially effective and sustainable manner.
Mr. Arthur said the seminar which is being attended by commercial banks in the country and importers was to expose them to new trends in trade finance and also share ICB’s experience with the participants.
He said exporters and importers needed to fully understand the risks involved in trade finance to enable them to make right decisions.
“There is the need for more understanding of risk not just counterparty credit, country, currency risk, but also compliance risk,” he said.
By David Adadevoh