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Merger of three institutions into Ghana EXIM Bank begins
Mr Zac Bentum — MD, Eximguaranty Company Limited

Merger of three institutions into Ghana EXIM Bank begins

A Technical Committee formed by the government to help ensure the smooth takeoff of the Ghana Export Import Bank (Ghana EXIM) Bank has started collapsing the Export Trade, Agricultural and Industrial Development Fund (EDAIF), the Export Finance Company Limited (EFCL) and the Eximguaranty Company Ghana Limited (ECL) into the new bank.  

 

The merger process is expected to concluded later in the third quarter to pave the way for the smooth takeoff of the Ghana EXIM Bank. The establishment of bank, which is expected to provide long term funding to businesses, has been on the drawing board for decades.

The Board Chairman of ECL, Mr Felix Ntrakwah, however, said at the company's annual general meeting in Accra that efforts at establishing the bank were proceeding in earnest after the successful passage of the Ghana EXIM Bank Act, 2016 (Act 911) earlier this year.

"The integration process of our company with EDAIF and EFCL into the new Ghana Exim Bank has begun in earnest. A Technical/Transition Committee is already working on integration modalities for smooth implementation and we are reliably informed the Exim Bank Board has been constituted and we await the announcement soon," he said

"As a board, we are also doing our best to meet all the legal requirements expected to facilitate this integration process," he added.

The successful integration of the three companies and the subsequent takeoff of the EXIM Bank is expected to lead to the dissolution of the affected companies and that will result in the loss of about 25 jobs. 

2015 performance

The company's audited results showed that  the value of guarantees issued declined by 59 per cent last year, translating into a four per cent decline in the fees and commissions earned on such guarantees.

Guarantee fees and commissions was GH¢1.5 million in 2014 but dropped to GH¢1.4 million last year due to what the board chairman described as "the myriad of challenges that confronted small and medium enterprises (SMEs) and financing institutions like ours in 2015."

The development was, however, compensated by a 10 per cent rise in total revenue, which grew from GH¢6.2 million in 2014 to GH¢6.8 million last year.

"Our performance, in respect of guarantees issued, fees and revenue, could have been better but for Ghana Cocoa Board's decision not to accept guarantees from Non-Bank Financial Institutions," Mf Ntrakwah said. That action by the board meant that Eximguaranty could not g

Issue guarantees for the construction of the coco roads, of which construction works started last year at a cost of some US$1.5 billion.

Eximguaranty's results further showed that total investment income grew by 14 per cent within the period while total net assets declined to GH¢16.3 million, GH¢9.3 million recorded in the previous year. 

Despite the challenges with fees and commissions from guarantees, the company's net profit rose by 348 per cent to GH¢150,732 as of December, last year. 

Rebounding economy 

Despite the uncertainty sorrow being the continuation existence of the company this year, its managing Diretor, me Zack Bentum, said the company would continue to take advantage of the rebound in the economy to help grow its balance sheet and give higher returns to shareholders.

"This year’s outlook appears bullish, with government’s investment in the energy sector yielding positive results for businesses. The unfortunate nightmare ritual of power rationing, usually called ‘Dumsor,’ is beginning to give way for SMEs to utilise their full capacities for business development," he said, explaining that such commitments had result in a rebound in business confidence.

"Being an election year, we expect a disciplined approach to spending in Infrastructural development to drive the economy and as a business concern, Exim will take full advantage through various initiatives to improve our bottom line," he said.

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