President Nana Addo Dankwa Akufo-Addo has launched the $750 million Development Bank Ghana(DBG), a policy initiative aimed at advancing the government’s vision of a Ghana Beyond Aid.
The launch marks the beginning of positioning the private sector to take the lead in the socio-economic transformation of Ghana, and create quality jobs for the teeming youth.
Speaking at the event, which took place at the Kempinski Hotel yesterday, President Akufo-Addo said the launch of the bank was “the culmination of years of painstaking efforts” undertaken by his government to “strengthen the infrastructure for the transformation of the Ghanaian economy for private sector-led growth.”
He explained that since Ghana’s independence, efforts had been made to improve access to finance and markets, with earlier attempts resulting in the creation of the National Investment Bank and the Agricultural Development Bank.
He noted, however, that these institutions had not succeeded in delivering on the promise of systematic support for private sector growth, hence the extensive technical engagements between the Finance Ministry and KfW in Germany, as well as other multilateral institutions such as the European Investment Bank, the World Bank and the African Development Bank for the setting up of a development bank.
“Accordingly, government put up an initial equity investment of $250 million, the European Investment Bank €170 million, World Bank $225 million, and a $40 million grant came from the African Development Bank. The total committed capital to the Bank, both debt and equity, is currently some seven hundred and fifty million dollars (US$750 million),” he said.
The bottom line
President Akufo-Addo told the gathering that the Bank’s focus is to help transform the key sectors of the economy, by supporting all institutions that are essential for the transformation of Small and Medium-scale Enterprises (SMEs).
These sectors include manufacturing, agriculture (especially off-farm value chain activities), ICT and allied services, tourism, and the mortgage and housing market.
He recalled that the idea of setting up the Development Bank was announced in the 2017 Budget Statement and Economic Policy when he first assumed office.
“It is one of many policy initiatives that my government has come up with to help transform the Ghanaian economy. The overriding objective is to make long-term funding available to the private sector, and develop the ecosystem for market access, technology and innovation,” the President said.
President Akufo-Addo added: “Undoubtedly, Development Bank Ghana should be the bedrock 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.”
Work with private sector
The President directed the Bank to partner with the private sector, and work with them to provide access to long-term funds, access to markets, both domestic and foreign, and skills developments.
“Development Bank Ghana will support all banks in the economy to have access to long-term funds, including the National Investment Bank, the Agricultural Development Bank, and the Ghana Exim Bank. It will also support private equity funds, and other capital market firms to have access to our bond market, and facilitate equity financing for SMEs,” he said.
Again, he said, the Bank will partner with research institutions to undertake sector research, and support innovation centres as well as business accelerators.
“It will ensure that the requisite capital is directed towards business ideas with the most potential for growth and job creation, under the financial services ecosystem,” President Akufo-Addo further added.
Touching on the recruitment process for the Bank’s first chief executive, the President described the procedure as rigorous.
He explained that PricewaterhouseCoopers identified, screened and interviewed 125 candidates, who responded to domestic and international advertisements. It ended up with Yaw Ansu, a well-known economist and a former senior World Bank executive as Chairman of the Board of Directors, and Kwamina Duker, who has some 30 years of experience of leadership in financial institutions in several parts of the world, serving as the first CEO.
The President said his government expects the Development Bank Ghana, “to use its strong financial position to support the growth of private sector companies to help create high-quality jobs, and enable Ghana’s private sector to compete more favorably within the African Continental Free Trade Area framework.”
“The Board has been tasked to scale up the Bank’s resource envelope to drive the country’s economic transformation agenda and entrench the institution’s international pedigree. I want to assure the Board of the Bank that Government will not interfere in its decision-making process, to guarantee its independence of operation, and enable it to work professionally and efficiently in the larger interest of its overarching objective of helping drive private sector-led growth of our national economy,” he added.