Banks are well capitalised to finance mining industry --John Awuah

BY: Emmanuel Bruce
Dr Sulemanu Koney (2nd right) joined by John Awuah (2nd right), and Seth Twum Akwaboah (right) at the launch of the Suply Chain Financing Programme

Banks are now well capitalised to venture into investments in the mining sector, Chief Executive of the Ghana Association of Bankers, John Awuah, has assured.

He said the financial sector clean-up exercise undertaken by the Bank of Ghana had equipped many Ghanaian-owned banks to lend funds into areas that would help develop the country’s infrastructural needs.

Mr Awuah said this at the launch of Supply Chain Financing Programme which seeks to provide financing for small and medium enterprises in the mining sector.

“Now we have Ghanaian banks investing in the construction and expansion work at the Takoradi dry-dock. That’s not all; a lot more Ghanaian banks are going into lending for infrastructural development.

“That is the only way we can develop the nation and create more jobs in the economy,” he said.

Supply chain financing

The launch of the Supply Chain Financing Programme forms part of efforts of the Ghana Chamber of Mines to build the capacity of local companies to actively engage in the extractive sector.

The programme provides an integrated platform for banks, mining companies and SMEs, and is targeted at improving local content in the mining sector.

Speaking to the Daily Graphic at the launch, the Chief Executive Officer of the Ghana Chamber of Mines, Dr Sulemanu Koney, said a research conducted by the Chamber showed that financing for local suppliers in the mining sector was a huge challenge to Ghanaian companies.

He said following discussions with relevant stakeholders, the Ghana Association of Bankers was consulted to help provide funds for local suppliers at a favourable interest rate.

“Mining is a catalyst for development. However, you can’t just sit down, fold your arms and literally say mining is a catalyst for development.

“We are not a finance house, but we help by bringing the companies and the banks together to understand the supply chain,” he stated.

Creating a conducive environment

Dr Koney said the Chamber also contacted the Association of Ghana Industries to help create a conducive environment that encourages banks to lend to small businesses in the mining sector supply chain.

He said a committee which was set up to supervise the programme engaged a lot of banks in the country to find out the specific products they have for the mining industry.

Out of the banks who were engaged, he said the committee shortlisted three banks who had designed specific products that would help finance activities of local companies in the mining sector.

The three banks include Republic Bank, Absa Bank and CAL Bank.

“The banks have therefore been given the opportunity to present workable financial plans to the Chamber in collaboration with companies in the supply chain,” he stated.