GHIB defies industry trend: Upscales African correspondent banks to boost cross-border trade
As numerous foreign banks either exit or plan to exit various African markets as part of their de-risking strategies, Ghana International Bank (GHIB), has chosen a rather different approach to risk management in its sub-Saharan operations.
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GHIB’s de-risking strategy for Africa is to train and upscale the capacities of correspondent banks in Africa to ensure the high standards of compliance required in facilitating cross-border trade.
At the just ended CNVERGE conference in London, Chief Executive Officer of GHIB , Dean Adansi, said the bank was positioning itself to fill the critical gap.
He said the bank was doing this by leveraging its regional expertise and robust network in an evolving economic landscape.
“At a time when other financial institutions have de-risked and exiting the Sub-Saharan Africa region, GHIB has elected to build capacity in the region and finance trade on the continent.
“During the recent financial crisis in Ghana, GHIB continued to finance trade even as other banks retreated and de-risked,” he said.
Given the important role of treating advancing growth in our markets, he said it’s imperative to find and implement solutions to promote trade activity.
“I think the biggest question to keep in mind as we explore and discuss species related to trade of this conference is how best to play our part in growing trade in our markets,” he said.
He added that Ghana International Bank (GHIB), through its CNVERGE conference, is committed to being a pivotal player in addressing these challenges and shaping the future of African trade.
As one of the pioneering pan-African financial institutions in the City of London, he said the bank was uniquely positioned to lead these critical conversations.
Experience
CNVERGE has been specifically designed to harness GHIB’s extensive experience and leverage its network of partners, clients, and even competitors.
Through this platform, the bank aims to initiate a continuous series of roundtables focused on generating, discussing, and implementing new ideas to foster the growth of African trade.
The inaugural conference, which was held under the theme “The Risk/Opportunity Interplay for African Trade,” had participants from over 60 corporates, sovereigns and banks operating in the United Kingdom and Sub-Sahara Africa.
High-level representatives from the central banks of Ghana and The Gambia as well as trade and economic attaches from African High Commissions in London, attended the event.
International Trade in Africa has long faced significant barriers due to the trade finance gap, a persistent and formidable obstacle that hampers business activities both within the continent and with external partners.
This gap, characterized by the disparity between the demand for and supply of trade finance, was estimated by the African Development Bank to have reached a staggering USD $81.8 billion in 2019. More recent assessments suggest that this shortfall could now be as high as USD $120 billion.
The situation has been further aggravated by a global trend of de-risking, which has led to the withdrawal of many global banking franchises from the African market.
This retrenchment has been driven by concerns over the perceived risks associated with financial transactions in the region, compounding the challenges faced by businesses that rely on trade finance to facilitate cross-border trade and investment.