GOVERNMENT HAS announced it is working with the World Bank and other development partners to capitalize the National Development Bank (NDB) to commence operations next year.
Ken Ofori-Atta, Finance Minister, disclosed this to Parliament yesterday in Accra, when he presented government’s budget statement for 2020.
According to him, “We have secured US$250.0 million from the World Bank as initial capitalization to kick- start the operations of the NDB and an interim board was set-up. In view of the high level of interest generated, other donors such as DFID, KFW and AfDB are expected to provide additional capitalization for the bank once it becomes operational in 2020.”
He said the NDB, as envisioned, would refinance credit to industry and agriculture as a wholesale bank as well provide 80 guarantee instruments to encourage universal banks to lend to specific sectors of the economy.
“It is expected that the National Development Bank will provide cheaper and long term funding for the growth and expansion of key companies operating in the agriculture and industry sectors. The development bank will also lend through specialized banks to key anchor industries at the Metropolitan, Metropolis and District Assemblies level to support the Governments IDIF initiative,” the minister noted.
Banking sector condition
Commenting on the current status of the banking sector, Mr Ofori-Atta said government had made significant strides with the banking clean-up process which it started in 2017.
“We have so far spent close to GHȼ13 billion to provide various bailouts to the financial sector. In addition, government has successfully restructured the fundraising model for the Ghana Amalgamated Trust (GAT) initiative set up to support solvent and well-run indigenous banks to meet BOG’s minimum capital requirement of GHȼ400 million.
“GAT has already committed funds from pension funds and other investors, through a bond programme, with proceeds of up to GH¢2.0 billion, which was used for equity investment in eligible indigenous banks, as determined by the investors. To date four banks have received support from GAT,” he added.
BY Samuel Boadi