The Minister for Finance, Ken Ofori-Atta, has revealed that the newly established Development Bank Ghana (DBG) will, in the next five years, pump $1 billion into the National economy under the Ghana Cares Obaatan Pa programme.
Addressing a news conference in Accra yesterday, Mr. Ofori-Atta said DBG would also help address two important constraints in the country’s financial system – lack of long-term funding and the lack of adequate funding to the productive sectors of the economy.
He said through the DBG, investment will be made in Agribusiness with a focus on off-farm value-chain activities, manufacturing, ICT, software and allied services, including business-process outsourcing, tourism and boosting home ownership through affordable and longer tenure mortgage finance.
“DBG is not similar to the existing commercial banks that we have in the country. It is a non-deposit taking Wholesale bank. DBG will neither give retail nor direct business loans, like the former Bank for Housing and Construction, NIB, ADB and the like.
“It will rather provide funds to the existing commercial banks and other qualifying financial institutions to provide long-term lending and other innovative products that are presently lacking in the system. The bank will, therefore, complement and strengthen the operations of existing financial institutions,” he added.
Providing reasons why government considers DBG as the best approach to elevating the country from the COVID induced setback, the Minister explained that the creation of a modern and dynamic development bank is critical to the country’s economic rebound.
He said this approach has the potential to attract more private and international institutional capital as observed by the €170 million facility by the European Investment Bank (EIB) noting that the bank starts from a clean slate, with no legacy financial, governance and other issues an advantage policy banks like the Agric Development Bank (ADB) and National Development Bank (NIB) do not have.
Capitalization of DBG
Providing further details on the bank, the Minister said the bank will be launched in July 2021 with an initial government of Ghana equity contribution of $250 million of which US$200 million has already been paid by government and institutional investors.
He said government aims to increase DBG’s lending capacity by raising additional funds from domestic and international private and institutional investors in order to build the needed foundation for the bank to shore up the Ghanaian economy.Read Full Story