Devt bank takes off July

The country will own a development bank in two months’ time after almost five years of strategising on how best to address the long-term funding lag facing businesses.

The establishment of the bank would be the beginning of another national strategy to pool patient capital into a state vehicle and use the availability of competitively priced long-term capital to help unlock the potential of the private sector to boost national development.

The Finance Minister, Mr Ken Ofori-Atta, said at a press briefing on May 9 that the bank would start operations in July to “provide long-term wholesale financing to the private sector through commercial banks.”

Excitement

The Association of Ghana Industries (AGI) said news of the coming into being of the bank was exciting, given the expected benefits to industry and the economy in general.

“We are happy because we have been waiting for it. We are for it and we have always made the point that we need a development bank.”

“Now, if it is about to be launched, we are happy,” the Chief Executive Officer of AGI, Mr Seth Twum-Akwaboah, told the Graphic Business on May 10.

World Bank support

Envisaged as a critical component of the private sector and national development agenda, plans for a development bank started around 2017 but dragged along the line, having hit some impediments and taken various turns.

At one point, the Ministry of Finance was of the strong conviction that the National Investment Bank and the Agricultural Development Bank (ADB) be merged into a development bank but that was later shelved, giving way to a new drive to build one from scratch.

That proposal received a major boost in late 2020 when the Executive Board of the World Bank Group (WBG) approved US$250 million from the bank’s International Development Association (IDA) to be used to finance the establishment of the bank.

The bank said in a statement at the time that the establishment of the Development Bank of Ghana (DBG) would help to increase access to long-term finance and boost job creation for 10,000 enterprises in key sectors, including agribusinesses, manufacturing and high value services.

“By offering long-term wholesale financing, credit guarantees, and other services, the Ghana Development Finance project will help increase overall lending to priority sectors and market segments,” the World Bank’s Country Director for Ghana, Sierra Leone and Liberia, Mr Pierre Laporte, said.