Non-traditional export sector gets major boost — Fidelity Bank, FAGE sign MoU to boost financing
THE financing issue that has plagued Ghana’s non-traditional export sector is expected to ease with the signing of a Memorandum of Understanding (MoU) between Fidelity Bank Ghana and the Federation of Associations of Ghanaian Exporters (FAGE).
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Ghana's non-traditional exports (NTEs) for 2022 reached $3,531,048,234, a six per cent growth over $3,330,317,588 in 2021.
The amount reported represented 20.22 per cent of the total merchandise exports for the year.
Experts have said that much as there was an increase, the potential in the sector is huge but will require some substantial financial support from the commercial banks in the country to change the narrative for the better.
The Ghana Export promotion Authority (GEPA) is presently targeting about $5 billion from the NTE sector but that, experts believe, can be achieved if stakeholders realise the potential and lend their full support.
In partnership with the Development Bank Ghana (DBG), the pact which is meant to boost the country’s non-traditional export financing, also focuses on promoting export growth as the parties determine to collaborate on strategies, identifying opportunities, offering market insights, and providing tailored financial solutions such as export financing and foreign exchange services to exporters.
Additionally, it will facilitate market access expansion by identifying new markets, providing market intelligence, and guiding entry strategies and regulatory factors.
The Managing Director of Fidelity Bank Ghana, Julian Kingsley Opuni, signed on behalf of the bank while the President of FAGE, Davies Narh Korboe, initialled for the federation.
To kick-start the partnership with FAGE and DBG, the Fidelity Export Club is organising a series of fora across the nation to arm various Ghanaians exporters with the requisite know-how and skill-set to adopt and integrate critical sustainability principles into their business practices.
The maiden Sustainability Forum for Ghanaian Exporters came off immediately after the launch last Tuesday, in Accra and comprised a number of workshops and interactive sessions with a seasoned collection of local and international experts in Sustainable Business.
Strengthening the export sector
Speaking to the media after the signing ceremony, Mr Opuni said although a lot of conversations have been around building stronger relationships to reduce the over reliance on imports over the last few years, much work has not been done to achieve that.
He said it was important that banks worked with the key sectors of the economy that would create growth for the country, a reason why the collaboration was important.
He explained that banks needed to get closer to businesses to understand their challenges and formulate products that would bring solutions to the challenges they faced.
“The idea of doing this is to work from the exporter back to the bank to know what their challenges are and what support they need. Because if we create a solid foundation, even lending becomes a lot easier and we create an even path not just for Fidelity but the whole banking sector to support what we believe is the most important sector in our country now,” Mr Opuni stated.
Expressing excitement about the agreement, Mr Korboe said Ghanaian exporters hardly obtain finance for export operations due to high interest rates, and financial institutions granting short-term credit.
“When we talk of funding, most financial institutions look at the export forgetting about production which is a major challenge because you cannot export without producing so we are looking at banks funding from the production stage through to exportation which is more viable.”
This partnership has come at the right time as it is really needed by the non-traditional export sector to boost Ghana’s economic growth,” he added.