The Ghana EXIM Bank has hinted it is considering going on the bond market for sustainable long-dated financial instruments to meet demands for financing support from local export-focused businesses.
Being the financial backbone to champion Ghana’s industrialisation agenda through supporting manufacturing industries, agribusinesses and exported production companies, the Bank’s current source of funding is from an import levy which is not a sustainable way of meeting its core mandate.
As GEXIM is looking beyond its current source of funding to other sustainable and cheaper sources, then the bond market is surely a sustainable source of funding for a policy and developmental driven financial institution such as GEXIM Bank. It can also access longer maturity facilities mostly directed towards long-term development projects.
“Just last week, we had a board meeting and we looked at other cheaper and sustainable source of funding. And the bond market was one focused area we will soon go”, the Chief Executive Officer of GEXIM, Lawrence Agyinsam said during a briefing session with executives and editors of the Private Newspaper Publishers Association of Ghana, (PRINPAG) in Accra.
With its current debt recovery rate above 60%, it is a good outlook to take advantage of the domestic and international bond market. This means more local export trade and businesses will get backing and support to do to help leap-jump Ghana’s Non-Traditional Exports (NTEs) earning in near future.
The CEO in his presentation listed with photographical evidences of over 80 factories and farms (existing and new) the Bank has supported for the past three (3) years in the areas of pharmaceutical manufacturing, agrochemicals manufacturing, poultry, fruit juices processing, other agribusinesses, garments and apparels factories, youth support in greenhouse technology, Shea butter processing among others.
GEXIM established in 2016, by an act of parliament, ACT 991, aim to become a strong financial institution that will be a key engine in the development of Ghana’s export trade, facilitate cross border trade and make Ghana a pillar in regional and continental trade.
Fortnight ago, the Bank pledged to give additional support to local pharmaceutical manufacturing companies to help them meet the World Health Organization (WHO) Good Manufacturing Practice (GMP) compliance so they could export drugs to the West African sub-region.
The bank has initially supported these local pharmaceutical manufacturing companies with a US$10 million facility each to about nine (9) companies some years back.
Entrance Pharmaceuticals (the largest pharmaceutical manufacturing company in West Africa currently) is set to start production of (Hydroxyl Chloroquine) which is confirmed and being used in many countries as one of the cure for COVID-19 and already producing other essential drugs.
“We are ready to give further support to these pharmaceutical companies as we are impressed with how they utilized the initial support”, the Board Chair for Ghana EXIM Bank, KwadwoBoatengGenfi has said during a tour of some local industries that had received funding support from the Bank.
Ghana is ready to be self-sufficient in pharmaceutical products very soon and export the excesses to help the country earn more foreign income to help strengthen the local currency (Cedi), the Chief Executive Officer of EXIM Bank, Lawrence Agyinsam added in a short address during the tour.
Some of the companies visited were; Entrance Pharmaceuticals (subsidiary of Tobinco Group of Companies), Ernest Chemist, Atlantic Life Scientists (subsidiary of Pharmanova Industries), and Kinapharma Industries.
The Pharmaceutical Manufacturers Association of Ghana (PMAG) has targeted to produce 70 percent of the country’s essential pharmaceutical products within the next three years.
The move is meant to reduce the importation of pharmaceutical products into the country and create more job opportunities in line with the Ghana Beyond Aid agenda.
Currently, the 15 local pharmaceutical companies in the country account for 30 per cent of the country’s essential drug requirement, with the remaining 70 per cent imported.
However, Ernest Bediako Sampong, Chief Executive Officer (CEO) of Ernest Chemists Limited (a local manufacturer of pharmaceutical products), during the tour to its new manufacturing plant under construction noted that, the pharmaceutical companies had begun rolling out initiatives to expand their existing infrastructure and to introduce modern technologies into their operations to improve production.
“What is required to realise the targeted output is adequate funding support from the government”, Sampong posited.
He added that, GEXIM Bank’s investment into the pharmaceutical industry had helped many of the companies to undertake innovative projects and to acquire appropriate technologies to boost their production.
“We are calling however for funding support to be made sustainable in order to allow us to complete some of our ongoing projects since a lot of pharmaceutical products are going to be manufactured locally.
“We also intend to export and it means that we will earn foreign exchange, employ more people and train them to acquire skills needed to improve the system,” he said.
Additionally, the Managing Director of Tobinco Group, Kwadwo Asare Twerefour, said investing in key infrastructure projects was crucial to achieving self-sufficiency in the pharmaceutical industry.
He said Tobinco Pharmaceuticals was setting up a sterile plant to enable it to go into producing sterile pharmaceutical products and avoid dependence on imported products.
“All of us are trying to increase our capacity, improve on technology and expand our production lines so that we can produce most of the essential drugs that this country needs; but we need more funds to do this,” he said.
The GEXIM Bank team was satisfied that the bank’s investment in the pharmaceutical industry was yielding good results and gave an assurance that more funds would be pumped into the industry.
Mr. Agyinsam, in-wrapping up the tour said, investment in local pharmaceutical companies to produce essential medicines locally was a giant step towards self-sufficiency.
He urged local pharmaceutical companies to get themselves ready to take advantage of opportunities that the African Continental Free Trade Area (AfCFTA) would present to them.
By Adnan Adnan Mohammed