Accra, Tuesday 14th June, 2022 - The President of the Republic of Ghana, Nana Addo Dankwa Akufo Addo has indicated that, the newly launched Development Bank Ghana, (DGB) has the capacity to move the nation towards achieving the Ghana Beyond Agenda.
He said, the setting up of the DBG was one of many policy instruments that were specially designed to transform the Ghanaian economy, “the Bank must become the foundation 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”.
The President made this known at the launch of the Development Bank Ghana in Accra which was attended by Government Officials, Board and Senior Members of the Bank, Representatives from Development Partners, Representatives from Financial Sectors, and the Media.
He revealed that, Government’s quest to improve access to finance and markets to support the private sector after numerous failed attempts by financial institutions led to the set of the DGB.
“Today we all know that ADB and NIB have become universal banks and depend on short term deposits, they are also regulated under an Act that does not provide room for broad-based support to the private sector through long term lending (5 years and above) and market access support through the development of our SMEs ecosystem”, President Akuffo Addo said.
He disclosed that, an outcome from a feasibility study led by PWC after the approval of the 2017 budget showed that, in the banking sector only 11% of loans were medium to long term; and most of these were for large corporate and SOEs.
The capital markets were also shallow and incapable of supporting the availability of medium to long term capital unless a deliberate intervention was made to support these institutions; especially for private equity funds, corporate bond issuances on the GFIM and the Alternative market.
“It is this critical analysis that confirmed my Government commitment to setting up the DBG, and in a unique way, leveraging on the experience of very successfully partners like KfW, EIB, World Bank, AfDB” Nana Akuffo Addo revealed.
On governments’ financial commitment to the bank, the President revealed an initial equity investment of $250m, with additional funding commitment from EIB (170m Euros), World Bank ($225m), AfDB Grant of ($40m) and added that, the total committed capital to this Bank, both debt and equity, was currently about $750m, (1.2% of GDP).
He again underscored the need for the Bank to partner the private sector, AGI, Private Enterprises Foundation (PEF), Employers Association, Pharmaceutical Industry Association of Ghana, Federation of Association of Ghanaian Exporters, Ghana Securities Industry Association, Ghana Association of Bankers, among others.
Development Bank Ghana, the President gave assurance would support all banks in the economy to have access to long term funds, including NIB, ADB and Exim Bank as well as private equity funds and other capital market firms to have access to bond market and facilitate equity financing for SMEs
President Akuffo Addo listed some other benefits the Bank was expected to provide Ghanaians, such as using its strong financial position to support the growth of private sector companies, create high-quality jobs, and enable Ghana's private sector to compete more favorably within the AfCFTA framework, continuing to tap into the international capital market, developing the domestic debt market, and designing products to attract diaspora funds into critical sectors of the economy.
The Board Members of the Development Bank Ghana are Dr. Yaw Ansu, Development Economist as Chair, Charles Boamah, Former Senior Vice President, AfDB, Stephan Leudesdoff, Former Senior Staff of KfW (German Development Bank), Rosemary Yeboah, Former COO, Ecobank Group, Mary Boakye, International Corporate Lawyer, Yaw Nsarkoh, Executive Vice President, Unilever Ghana and Nigeria, and Nora Bannerman, Founder and CEO of Sleek Garments Export Limited, and Mr. Kwamina Duker is the Chief Executive Officer (CEO) of the Bank. END