Cost of finance remains a bane for Ghanaian exports
Ghana’s export fortunes look bright especially with the advent of Africa Continental Free Trade Agreement and the development of the National Export Development Strategy. Yet, the cost of finance remains a major impediment for exporters.
CEO of Golden Riverside Limited, one of Ghana’s burgeoning pineapple businesses, Solomon Ntow Wiafe is the latest to lament the lack of sufficient funding facilities and high cost of borrowing to support Ghanaian export.
He said “cost of borrowing is quite high now. Last year or two was about 20%, but now it is around 26-30% which is not so good for us.”
According to Mr. Wiafe, “the perishables we are dealing with involves a lot of capital and once you are not well-resourced it makes our work difficult. Once you have orders and you do not have the needed resources to be able to make up for those orders, you lose your client so we need the banks to assist us well.”
He said banks are often reluctant to accept the lands of farmers as viable collateral which he is unhappy with due to the fact that lands are farmers’ greatest assets.
The pineapple businessman made these remarks while on Eye on Port discussing exports.
Contributing to the discourse, the Director of Projects at the Ghana Export Promotion Authority, Alex Dadzawa, appeal for banks to make adequate arrangements to support Ghanaian exports.
“I am advocating strongly that they should put dedicated funds for SMEs because most of these exports are small in nature, and this is why the banks were set up. To support such enterprises.”
He said not only is it in the interest for exporters, but in the banks own interest to support Ghanaian business to export.
“When the exporters export, the revenues come through the banks and they hold the foreign exchange for some time, use it for their purpose before they give the exporters in Cedis so they have some responsibilities towards the exporters so the little they can do is turn their focus to them,” Mr. Dadzawa asserted.
The GEPA official however acknowledged some significant contributions by the EXIMBANK and spurred them on to do more.
He said during the launch of the coconut festival recently, EXIMBANK announced that they are dedicating GHC 30M solely towards the development of the coconut industry while promising to dedicate similar amounts to the yam industry.
Mr. Dadzawa was very optimistic that when the various priority areas identified within the National Exports Development Strategy (NEDS) are supported financially, Ghana will exceed the $25Billion target for non-traditional exports.
