ADDRESS BY HON. DR. KWABENA DUFFUOR, MINISTER OF FINANCE AND ECONOMIC PLANNING AT THE INAUGURATION OF THE BOARDS OF DIRECTORS OF THE NATIONAL INVESTMENT BANK ON WEDNESDAY, 12TH AUGUST, 2009 AT 10:30 A.M.

Mr. Chairman
Members of the Board
Ministry of Finance and Economic Planning Officials
Distinguished Guests
Ladies and Gentlemen

Ladies and Gentlemen: It gives me great pleasure to inaugurate on behalf of His Excellency the President, the Board of Directors of the National Investment Bank (NIB) Limited. This Bank was established as the first development bank in the country by Osagyefo Dr. Kwame Nkrumah to spearhead the industrialization drive of the first independent Sub-Saharan African country. It was mandated to provide long term debt financing and equity or risk capital for start-up industries in the manufacturing, services, construction and mining sectors of the economy.

NIB was also to provide financing to agriculture, especially for agro processing industries.

The industries were to generate and conserve foreign exchange earnings through exports and import substitution as well as to provide employment for Ghanaians.

Over the years, the Bank has had a very chequered history corresponding to the trends of the macro-economic fortunes of the country. This notwithstanding, one can safely say that the NIB has contributed significantly towards the overall economy of Ghana and the development of the banking industry as well.

The NIB's contribution to the development of the banking sector has largely resided in the provision of trained manpower to service that Sector.

In the very recent past, however, NIB has attracted very adverse publicity. This has been the result of some imprudent decisions taken by the immediate past management which almost brought the operations of the Bank to a halt. Some of these decisions have resulted in large non¬performing asset portfolios and contingent liabilities in the construction, manufacturing and service sectors of the economy.

Additionally, as a universal Bank the NIB's over reliance on MDAs for a very large proportion of its deposits continues to create an unhealthy deposit risk concentration, a situation that is unsustainable in the current competitive banking landscape.

Staff numbers are currently exaggerated in relation to the volume of business and branch network making the Bank's operation less efficient compared to the industry average.

The effects of all these have been the loss of profitability and the erosion of shareholders' capital. This is unacceptable for a Bank that is expected to make profit and pay dividend to its shareholders.

The survival of the NIB Limited is currently under serious threat.

As a new Board therefore your cardinal challenge is to formulate and implement policies and strategies that will turn-around the Bank within the shortest possible time to enable it play its required role in the national economy.

In this regard, the Government will provide you the necessary support in your effort towards the restructuring of the Bank in the re-positioning of the institution to enable it fulfill its core mandate.

On the behalf of the Government, and His Excellency the President, I wish to congratulate you on your appointment. I hope you will discharge your duties with diligence.

The Board is now duly inaugurated.

Thank You and God Bless You All