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Exporters call for alternative export funding to spur growth

Aside from the Export Trade, Agricultural and Industrial Fund  (EDAIF), there is no dedicated fund setup to support activities of exporters,  the Business and Financial Times reported him stating.

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Goods being cleared at the Port play

Goods being cleared at the Port

President of the Federation of Ghanaian Exporters (FAGE), Anthony Sikpa, wants government to create a separate funding scheme to provide long-term financing for producers and exporters to boost economic growth.

Aside from the Export Trade, Agricultural and Industrial Fund  (EDAIF), there is no dedicated fund setup to support activities of exporters,  the Business and Financial Times reported him stating.

Parliament last week passed the Ghana Export/Import Bank (EXIM) bill into law dedicated to export financing.

"The EXIM Bank would move the country from import-dependent to a large-scale exporter,” president Mahama said in his State of the Nation address.

"The primary purpose [of the bill] is to finance exports, notably light industrial products," he added.

But Sikpa worries the EDAIF is going to be swallowed by the EXIM bank.

“And now, with the coming of EXIM Bank, EDAIF is going to be swallowed. So we are brought to the fore to understand we need to consider the fact that EXIM will not meet all our financing needs," he said.

"If you look at other countries that use the EXIM system, they are to help those producing and exporting to other countries so they can be more effective and competitive. Because of that, they have other financial schemes to help them,” he said.

A transaction adviser has been appointed to guide the integration of EDAIF, Eximguaranty and Export Finance Company into the new Ghana EXIM.

The transaction advisor is expected to value the equity stake of Eximguaranty and Export Finance in order to establish the value of minority interest.

It will also advise on negotiations with minority shareholders of Eximguaranty and Export Finance Company, and also effect the transfer of assets and liabilities of affected institutions to the EXIM Bank.

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Sikpa said the current financial packaging in Ghana does not consider long term financing, saying "a crop like mango takes three years to start fruiting but there is no fund beyond the three years that farmers can access to help them grow their business.”

He said in the U.S, aside from the EXIM bank, they have alternative funding for small businesses and that "these are some of the facilities that we are calling for to be provided here, if we really want to experience increases in crop production and exports.”

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