Financial institutions and Small and Medium enterprises (SMEs) in Ghana and Africa have been advised to take advantage of the numerous opportunities that exist in the Green Economy (GE).

Head of Business Development for African Guarantee Fund, Mr David Ekabouma, noted that SMEs and Banks have hesitated venturing into that economy though opportunities exist to broaden their profit bases, diversify product portfolios and address potential market needs.

He said the GE concept entailed a paradigm shift in contemporary development thinking, and contrasting the dangers posed by the unsustainable approaches to development in the past decades.

Mr Ekabouma added that practically, it involved changes in production, consumption and lifestyle towards economic activities that use natural resources efficiently, enhance and preserve environmental quality, and removing social inequalities.

He was speaking at the Green Finance Conference organised by the African Guarantee Fund (AGF), the International Trade Centre (ITC) and the Nordic Development Fund (NDF) in Accra on Tuesday.

According to him, the development of SMEs was one of the principal solutions to fostering environmental sustainability and more inclusive growth in African countries.

“There more than 70 million formal SMEs in developing countries; and at a global level, analysis suggests that there would be a significant need for greening finance in the trade, agriculture, and manufacturing sectors. In addition, it is likely that the wastewater, small hydro, and water technology sectors will see large SMEs participations,” he stated.

He noted that African SMEs, through the support of financial institutions, could play a pivotal role in promoting the climate agenda through innovative home-grown interventions.

Mr Ekabouma revealed that his organisation which has supported SMEs in over 38 countries across Africa had established a Green Guarantee Facility with the support of the Nordic Development Fund.

The facility, he explained was intended to enhance access to finance for climate and green growth-oriented SME’s, build knowledge and capacity of banks in Africa to scale up lending to the green economy.

Acknowledging the country’s vulnerability to climate risks, and the challenges climate change presents to economic development, Mr Frimpong Kwateng-Amaneng, the Director Real Sector Division of the Ministry of Finance, who spoke on behalf of the Minister of Finance said “we are witnesses to the impact of erratic rainfall in our agriculture sector, its impact on generation of hydroelectric power; we are aware of the occurrences of seasonal flooding that affect our cities and villages and the toll on life and property, and the destruction of our physical infrastructure; we have witnessed how coastal villages and coastal urban communities are gradually being washed away.

Dr Johnson Asiama, Second Deputy Governor of the bank of Ghana said even as the Central Bank strives to promote financial stability, they have also recognized the importance of promoting a Green Economy.

He noted that two years ago the Central Bank put together a working group in order to integrate and promote environmental concerns in the banking sector. “In 2018 we will be reign in strong in that effort”.

“There are commercial banks that are doing well when it comes to sustainable practices, some of the banks are beginning to use solar panels for their ATMs, and signage’s that we see on the streets and that is exciting” Dr Asiama stated.

He indicated that the next step was to use incentives rather than mandatory approach to make banks inculcate some of these practices into their businesses. “Last year an award was instituted as part of the Ghana Banking Awards which is essentially to award banks on how well they are promoting the sustainability agenda.