The President Nana Akufo Addo on Tuesday launched launched formally the Development Bank Ghana (DBG).
The Development Bank Ghana will spearhead the vision of a Ghana Beyond Aid, which involves positioning the private sector to take the lead in the socio-economic transformation of our country, and create quality jobs for our young people.
Speaking at the launch on Tuesday at the Kempinski Hotel, the President stated that the launch is the culmination of years of painstaking efforts undertaken by his Government to strengthen the infrastructure for the transformation of the Ghanaian economy for private sector-led growth.
According to Akufo Addo, the idea of setting up a Development Bank, was, indeed, announced in the 2017 Budget Statement and Economic Policy when he first assumed office. “It is one of many policy initiatives that my government has come up with to help transform the Ghanaian economy.
The overriding objective is to make long-term funding available to the private sector, and develop the ecosystem for market access, technology and innovation,” he said.
The Development Bank’s focus, the President said, is to help transform the key sectors of the economy, over a period of time, by supporting all institutions that are essential for SME transformation. These sectors include manufacturing, agriculture (especially off-farm value chain activities), ICT and allied services, tourism, and the mortgage and housing market.
President Akufo-Addo explained that since Ghana attained independence, efforts have been made to improve access to finance and markets, with earlier attempts resulting in the creation of the National Investment Bank and the Agricultural Development Bank. However, these institutions have not succeeded in delivering on the promise of systematic support for private sector growth.
It is for this reason that Ministry of Finance had extensive technical engagements with KfW in Germany, and other multilateral institutions like the European Investment Bank, the World Bank and the African Development Bank to mobilise international funding, diversify its shareholding and institute best practices to have an independent Board and a financially sustainable institution.
“Accordingly, Government put up an initial equity investment of two hundred and fifty million dollars ($250 million), the European Investment Bank one hundred and seventy million euros (€170 million), World Bank two hundred and twenty-five million dollars ($225 million), and a forty-million-dollar (US$40 million) grant came from the African Development Bank. The total committed capital to the Bank, both debt and equity, is currently some seven hundred and fifty million dollars (US$750 million),” he said.
President Akufo-Addo continued, “Undoubtedly, Development Bank Ghana should be the bedrock for our renewed commitment to private sector development. It is expected to work to transform our SMEs into well-functioning, formal and strong corporates with the potential to increase our GDP, employ more people, and enhance our tax efforts”. Work with Private Sector.
The Bank, the President said, must be partners with the private sector, and must work with them to provide access to long-term funds; access to markets, both domestic and foreign, and skills development.
“Development Bank Ghana will support all banks in the economy to have access to long-term funds, including the National Investment Bank, the Agricultural Development Bank, and the Ghana Exim Bank.”
“It will also support private equity funds, and other capital market firms to have access to our bond market, and facilitate equity financing for SMEs,” the President assured.
Additionally, he stated that the Bank will partner with research institutions to undertake sector research, and support innovation centers, and business accelerators, adding that “it will ensure that the requisite capital is directed towards business ideas with the most potential for growth and job creation, under the financial services ecosystem”.
