Banks in the country —both local and foreign— are willing and ready to provide structured financing to support local businesses along the mining value chain, Alhassan Andani, Chief Executive Officer/Managing Director of Stanbic Bank has said.

But for the banks to be able to do that, Mr. Andani noted that local firms will have to adopt a syndicated approach in order to secure funds to build their skills and industrial capacities in the bid to unlock the sector’s local content potential.

“The banking sector is well-structured in terms of the capacity of both local and foreign banks to support economic activities, and looking at the mining landscape I can say that we [banks] are ready to provide the financial backing for the mining sector.

“We are ready to work closely with local suppliers in the industry to form syndicates that can source for funds from the banks,” he told a gathering of mining sector stakeholders at the 2019 Ghana Mining and Energy Summit in Accra.

The total direct employment in the mining sector is 12,500 with a multiplier of about 28, and that puts almost 350,000 Ghanaians to work. The sector also boasts over 3,000 suppliers and contractors and disposed of an estimated US$307million in capital expenditure—this was about 19 percent of total minerals revenue for last year.

Total fiscal receipts by the Ghana Revenue Authority from the mining sector for the same period was GH¢2billion.

To Mr. Andani, these figures should mean a lot to banks in terms of throwing in the needed financial support to the sector. “For us as banks, these are very important people and we have to pay attention to their financial needs,” he said.

According to Mr. Andani, although there is a local content law to cede some gains of the sector to Ghanaian businesses – and by extension the economy, most of the policies do not address the supply side

He emphasised: “While most of the policies talk about local content, it does not deal with the supply side. Most of the local content is primarily joint ventures that are first-time entrants to the sector with little capital, limited industrial capacities and skilled labour to function effectively”.

Aside from the weakness in existing local content policies and limited industrial capacities, Mr. Andani cited information asymmetry and an unfriendly business climate as other pertinent concerns that must be tackled for locals to benefit from the mining sector.

He said local banks are ready to assist in this regard: “We are looking at working on a structure finance basis with groups of local mining companies that are ready to apply all their disciplines to ensure we can build the capacity of Ghanaians in and across the mining value chain”.

He added: “When banks come into mining, we are like the air that fills every room; we are not just big equity or long-term capital providers because we look at every aspect of the value chain”.

The Ghana Mining and Energy Summit is a biennial event of the Ghana Chamber of Mines that brings to the fore developments within the mining and energy sectors. It provides a platform for discussions on addressing the challenges of two critical sectors of the economy with a view to maximising their potential and contribution to the economy.