The President, Nana Addo Dankwa Akufo-Addo has launched the Development Bank of Ghana (DBG), which he promised Ghanaians when he assumed office in 2017.
The launch followed years of feasibility studies on the viability of the vision to set up a unique developmental bank, whose operations would stand out from the existing ones.
In Accra yesterday, President Akufo-Addo addressed a ceremony to officially launch the bank, during which he recalled what birthed the idea of a development bank.
According to the President, the day’s event was the culmination of years of painstaking efforts undertaken by the Akufo-Addo government to strengthen the infrastructure transformation of the Ghanaian economy for private sector-led growth.
“A year on, I am delighted that the Development Bank Ghana has seen the light of day. As its foundation will help steer the vision of moving our nation beyond aid…,” he said.
He explained that 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.
AIM
Announcing that the idea of setting up a Development Bank was in the 2017 Budget Statement and Economic Policy when he first assumed office, and according to the President, it was one of many policy initiatives that his government had come up with, to help transform the Ghanaian economy.
The over-riding objective, he continued, was to make long-term funding available to the private sector, and develop the ecosystem for market access, technology and innovation.
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.
FUNDING
The total capital of the Bank, both debt and equity, is currently some seven hundred and fifty million dollars (US$750 million).
The 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.
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.
BEDROCK
President Akufo-Addo continued the Development Bank Ghana should be the bedrock for renewed commitment to private sector development.
He said it was expected to work to transform 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 developments.
The President assured that the government would not interfere in the affairs of the board of the bank.
EXPERIENCES
In his remarks, the Finance Minister, Ken Ofori-Atta underscored that development banks across the globe have yielded both positive and negative impacts towards growth. Therefore, in setting up DBG, all those experiences were considered to have a different bank.
He said the bank should complement the operations of existing banks and should be regulated, he said thanking all who played roles to the formation of the DBG.
ABOUT THE BANK
The DBG was established in 2017. In 2020 the bank received its license from the regulator at the Bank of Ghana. The DBG focuses on ways to address market failures and meet gaps in the Ghanaian credit markets.
Its mandate is to increase the availability of medium and to long term financial instruments to support Ghanaian businesses. DBG’s goal will facilitate economic transformation and job creation.
DBG in essence will be constituted as a commercial banking institution governed by the provisions of the Ghanaian Company Act. As a result of our unique role in the market we operate a strict corporate governance structure in line with international standards.
