The Export and Import Bank of United States (EXIM) has signed an agreement with the Ghana Export-Import Bank (GEXIM) that will extend financial support to businesses under the One District, One Factory programme.

The pact, dubbed the ‘Cooperation Framework Agreement’, is an arrangement whereby the U.S. EXIM Bank will give US$300million to GEXIM – and the latter will further on-lend to Ghanaian SMEs under the One District, One Factory programme for the purchase of U.S. goods and services.

This means companies which benefit from the funds will have to use the money to purchase equipment or services from the United States only. Up to US$10million can be disbursed to a company under this facility.

Commenting at the agreement’s launch in Accra, the U.S. Ambassador to Ghana, Stephanie S. Sullivan, said the pact will transform the country’s manufacturing sector as it will make credit available on very flexible terms.

“For many Ghanaian businesses and entrepreneurs, it is difficult to obtain credit at affordable rates and with realistic repayment terms so they can expand their businesses. This collaboration between our respective Export-Import banks creates a welcome opportunity for companies to adopt cutting-edge U.S. technologies and equipment and to finance them at competitive rates.

“Partnerships such as this which support the private sector are key to creating economic opportunities. This financing facility is an opportunity for Ghanaian businesses to access world-class U.S. technology and equipment to drive their expansion plans forward,” she said.

The Vice-President of U.S. EXIM Bank, Bonnie Cybulko, also said the agreement confirms President Trump’s interest in African countries through the Prosper Africa initiative that seeks to create jobs on the continent and support American exporters, and supply chain jobs in multiple industries in the United States.

CEO of GEXIM, Lawrence Agyinasam, said the agreement will better-equip his outfit in providing financial support to companies under the One District, One Factory programme.

“I am extremely delighted about this cooperation framework under which EXIM can provide up to US$300million in guarantees for GEXIM’s clients to source and procure machinery and equipment from the United States for their factories.

“As the lead financing institution mandated to support government’s One District, One Factory programme, GEXIM will be better-positioned to empower and equip private-sector operators situated in each district to add value to their raw materials through processing and final export,” he said.

Finance Minister Ken Ofori-Atta also said disbursement of the funds will boost local industries and help reduce the high importation that has contributed to the cedi’s depreciation this year.

“We are excited about the facility because it will really now show government’s commitment to the 1D1F programme. We have challenges in the stability of our foreign exchange, and it is simply because we are importing things like tooth-picks, among others. We should be able to ensure that we are able to produce some of these things for ourselves and turn people into entrepreneurs and manufacturers as opposed to traders. Now is the time to make sure that our capacity to generate foreign exchange is much more than what we spend,” he said.

The Cooperation Framework Agreement will remain in effect until April 3, 2022. All transactions will be approved individually and are subject to EXIM’s due diligence in finding reasonable assurance of repayment and compliance with all other EXIM requirements and policies.