Ghana is in early-stage discussions to join the African Guarantee and Economic Cooperation Fund (FAGACE), a pan-African financial institution that provides loan guarantees, direct financing and grants exclusively to its member states, as the government looks to broaden the financing options available to small and medium-sized enterprises (SMEs).
A delegation representing FAGACE, led by Eric Nkusi Bukeye of Rwanda, visited the Ministry of Trade, Agribusiness and Industry in Accra this week to brief Ghanaian officials on the terms and benefits of membership. Rwanda is one of FAGACE’s 14 member states, a group that spans West, Central and East Africa but does not currently include Ghana.
FAGACE has mobilised more than 2,500 billion CFA francs over its four-decade history, channelling resources into member economies through two principal instruments: individual guarantees extended directly to SMEs borrowing from banks, and portfolio guarantees that allow financial institutions to draw on a pre-agreed guarantee line for qualifying loans. Both tools are designed to reduce the credit risk that has historically kept formal bank financing out of reach for smaller firms.
Deputy Minister for Trade, Agribusiness and Industry Sampson Ahi said a formal decision on membership rests with the Ministry of Finance, which will determine policy direction and lead the accession process if Ghana proceeds. He indicated that the Ghana Export-Import Bank (GEXIM) would likely serve as the principal implementing agency once membership is formalised, while the Ghana Enterprises Agency (GEA) would coordinate outreach and engagement with SMEs across the country.
Ahi said the Ministry of Trade, Agribusiness and Industry would focus on creating an enabling environment and facilitating strategic partnerships, and urged the FAGACE delegation to open direct engagement with the Ministry of Finance to move the process forward, including the designation of implementing agencies.
The approach mirrors how Ghana has structured similar regional financing partnerships. Under the SME Growth and Opportunity Programme, GEXIM and the GEA have already served as joint implementing agencies alongside Development Bank Ghana, disbursing financing and technical support to high-growth SMEs.
Ghana’s SME sector accounts for approximately 92 percent of all registered businesses in the country and contributes an estimated 60 to 70 percent of gross domestic product, yet access to formal credit remains structurally constrained by collateral requirements and the difficulties smaller firms face in meeting documentation standards set by commercial lenders. FAGACE membership would add a regional guarantee layer to the domestic instruments currently being developed, including a credit insurance scheme being designed by the 24-Hour Economy and Accelerated Export Authority with the Bank of Ghana and the National Insurance Commission.
FAGACE was established on February 10, 1977 in Kigali and specialises in the promotion of both public and private investment across member states.
