Listen to this Article Now
Wednesday 26th may 2021
By: Norvisi Mawunyegah
The Lead Researcher of the Ghana International Trade and Finance Conference(GITFiC) Mr. Gerald Woode stated the African continental free trade area is a significant economic phenomenon and one of most recent issues among member state in the ongoing discussion of mutually beneficial intra- African trade at the GITFIC monthly press report on Tuesday 24th May 2021.The central knowledge focused on ‘’the role of trade finance in the successful implementation of AfCFTA ‘’. It also hammered on the importance of trade finance as a tool to achieving AfCFTA goals.
The findings stressed on policy recommendations of trade finance support programs to provide credit and liquidity for intra African trade, supporting regional integration by providing finance for intra-regional trade. Partial portfolio based guarantees issued to well managed commercial banks will stimulate private sector financial support to companies engaged in import and export activities. And to encourage reforms and policies that reduce information irregularity and facilitate credit information sharing through creation of credit information Bureaus and setting up of national collateral registry.
As global trade dropped by 12% in 2009, it is estimated that the trade finance gap in Africa during 2011 and 2014 declined from $90million to $120million due to significant rejection of trade finance applications and weak client credit worthiness plus inadequate collateral. Although measures of different development reforms have been introduced to address the situation, many businesses still have limited access to trade finance owing to concerns about potential risks and loses.
Trade finance support programs should be enhanced to provide credit flexibility to aid in intra-African trade.