President Akufo-Addo interacting with Mr Kwamena Duker (right), Chief Executive Officer (CEO), Development Bank of Ghana at the launch in Accra. With them is Mr Ken Ofori-Atta (left), Minister of Finance
The dream of having a wholly development bank came alive today when President Akufo-Addo formerly launched the Development Bank of Ghana (DBG).
This is intended to provide medium and long-term finance to the industrial and agricultural sector, especially Small and Medium Scale Enterprises (SMEs).
At a programme in Accra, the President charged the board and management of the DBG to work hard in the financial service sector to become the bedrock for private sector development in Ghana.
He said the huge initial investment made by both government and her development partners into the setting up of the bank should be able to spearhead their efforts to become the heartbeat of private sector development in the country.
The government was said to have put up an initial equity investment of $250million, with an amount of €170million from the European Investment Bank, $225million from the World Bank, and an additional $40million grant from the African Development Bank in the setting up of the bank, with a total committed capital to the bank (both debt and equity) at $750million.
President Akufo-Addo, therefore, stressed the need for the DBG to be the bedrock for the country’s renewed commitment to private sector development.
“It is expected to work to transform our SMEs into well-functioning, formal and strong corporates with the potential to increase our GDP, employ more people, and enhance our tax efforts,” he added.
DBG, the President indicated, has a fine opportunity to nurture good relations with all of its stakeholders to provide long-term financing to them as well as facilitate their ability to access both domestic and foreign markets.
“The bank must be partners with the private sector, the Association of Ghana Industries, Private Enterprises Foundation, the Employers Association, the Pharmaceutical Association of Ghana, the Federation of Association of Ghanaian Exporters, the Ghana Securities Industry Association, and the Ghana Association of Bankers”, he charged.
Apart from that, he asked them “to provide access to long term funds, access to markets, both domestic and foreign and skills development.”
On his part, Finance Minister, Ken Ofori-Atta, said careful consideration has gone into the processes leading to the setting up of the Development Bank Ghana, to make sure that international best practices are followed to make DBG a success.
“In setting up the DBG, we took a lot of effort, patience, and time to make sure we get this right. We paid particular attention to the role that KFW has played in Germany, an institution that in the 50s, might have spent about USD$ 1.2 billion dollars, and 70 years later, contributed over 1.3 trillion dollars to the economy of Germany. So it is this reconstruction and growth ethos that we how to duplicate”, he said.
Governor of the Bank of Ghana (BoG), Dr. Ernest Addison said it was a great milestone to finally move the Development Bank Ghana idea from conception to operationalization.
He noted that “the Bank of Ghana’s expectation is that DBG together with other DFIs that will be licensed, will help address market failures in Ghana’s credit markets, thereby, supporting businesses to invest long term and promote growth and job creation.”
DBG concept
The Development Bank Ghana (DBG), is a development finance institution with the mandate of acting as an enabler for businesses in Ghana and as a long-term capital provider in the market.
DBG was established in 2017 and 2020, the bank received its license from the regulator, the Bank of Ghana.
In essence, it is a commercial banking institution governed by the provisions of Ghana’s Company Act.
The Development Bank of Ghana will focus on finding ways to address market failures and meet gaps in the Ghanaian credit markets.
Its core mandate is to increase the availability of medium and long-term financial instruments to support Ghanaian businesses which eventually will lead to economic transformation and job creation.
Promoters of the bank envisage that the institution will among others, facilitate and strengthen long-term credit flow to Ghanaian businesses to drive long-term economic growth and transformation.
It is also to empower banks and entrepreneurs through financial innovation and other advisory services to strengthen the ecosystem in which businesses operate and promote excellence within the businesses it will support, particularly in Environmental, Social, and governance issues.
By Charles Takyi-Boadu, Presidential Correspondent