Let exports remain driving force for devt – GEPA to banks
FINANCIAL institutions must play a critical role to ensure that the export sector remains the driving force or one of the key determinants of Ghana’s economic development, the Chief Executive Officer (CEO) of the Ghana Export Promotion Authority (GEPA), Dr Afua Asabea Asare has said.
She indicated that the vast majority of companies operating in the export sector are small and medium enterprises (SMEs) which often find it extremely difficult to access financial support for their projects in spite of their potential within the economy.
Dr Asabea Asare mentioned one key challenge facing SMEs in the country saying when players in that sector turn to the banks for support, many of these financial institutions which claim to be heavily focused on SMEs fail to honour what they advertise, a development she described as not only regrettable but disappointing.
Dr Asare raised the issue in a speech read on her behalf at the maiden Consolidated Bank Ghana’s (CBG) Thought Leadership Breakfast Meeting on trade in Accra last Thursday.
The event on the theme: “Import versus Export, the role of the bank, Policymakers, Business, Stakeholders in ensuring Economic Growth and Currency Stabilisation”, brought together experts in the financial sector, export, industry and academia to discuss and find solutions to make the export industry a coveted one.
“The role of financial institutions is critical and imperative. Our financial institutions constitute the critical resource base that will oil the wheels of export development.
If we are to ensure that export remains the driving force and one of the key determinants of our economic development, we must pay attention to the sector,” she said.
According to the Ghana Statistical Service (GSS), in 2022, the total value of Ghana’s imports stood at GH₵148.6 billion, GH₵4.5 billion higher than exports which totaled GH₵144.1 billion.
For August 2023, the Bank of Ghana reported total exports of $10.766 million to exceed total imports of $8.75 million resulting in a trade surplus of $2,016 million.
Using the data, the GEPA CEO said there is no gainsaying that there has always been a huge dichotomy between imports and exports.
She said as a developing economy, Ghana needs to do all it takes to increase its exports as its imports also increase.
“At this stage of our development, we know that Ghana would necessarily depend on imports of critical products such as plants and machinery to be able to turn the wheel of its industrialisation agenda.
This is so because our industries are still weak and vulnerable to external shocks. However, unbridled dependence on imports and lack of commitment to drive exports would make it difficult for us to develop,” she added.
The Managing Director (MD) of CBG, Daniel Wilson Addo, said the bank is committed to support businesses, the private sector and more importantly, ensure that it is contributing its quota towards a collective and more sustainable achievement of an optimal Ghanaian economy.
He said the bank’s customers particular in the SMEs space have complained about how it has increasingly become difficult for them to access funding adding that “for those of them that are in export, the tariff and non-tariff barriers to export seem to be going up all the time making it difficult for them to navigate the terrain.”
Working capital support is great but what really grows the economy, grows productivity is long term capital, funding planting equipment, business expansion and technology. That is the next stage for our bank and that is why we have a strong collaboration with Development Bank, Ghana (DBG) that has a mandate to provide a long term capital formation for this economy,” Mr Addo said.
The Chief Executive Officer (CEO) of Development Bank Ghana (DBG), Kwamina Duker, said fostering economic prosperity will require collaboration between policymakers, industry and financial institutions.
He stressed that it is a shared responsibility to nurture an environment conducive to growth, innovation, and inclusive prosperity.
“Banks must serve as the bedrock of financial stability, providing the means for businesses to flourish. Their prudent management of good loans ensures the longevity of businesses and safeguards the economic foundations for a strong private sector,” he said.