GEXIM targets bond market as it expands investment support to local businesses
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Chief Executive Officer of GEXIM, Lawrence Agyinsam |
Adnan
Adnan Mohammed
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 BediakoSampong, 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”, MrSampong 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, MrKwadwoAsareTwerefour, 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.
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