The National Development Bank will now take off in July this year, Finance Minister, Ken Ofori-Atta has pointed out.
According to him, the development bank will provide long term wholesale financing.
“By the end of July, we will have a new Development Bank that will provide long-term wholesale financing to the private sector through Commercial banks.”
Earlier, the Finance Minister said the National Development Bank was expected to take off from January next year.
According to him, government has been able to raise the required seed capital for the financial institution to fully begin operations.
Revealing this at the Ghana Employers’ Association meeting in Accra, Mr. Ofori-Atta maintained that government is fully committed to assisting businesses, post easing of covid-19 restrictions.
“The establishment of a national development bank under the Ghana Cares Programme is expected to provide support to businesses. As you might have heard, we have already raised US$500 million dollars for this.”
He further said “as you know, the cost of borrowing has come down and we will try to drag it down to single digit as your president [President Akufo-Addo] says access to capital and the foreign exchange regime has been relatively stable and quite a miracle especially in this year when we had about 2.6 to 2.9%.”
Why the establishment of the National Development Bank?
The government in 2017 hinted it will establish a national development bank in the country.
The move was to provide innovative and long term financing instruments for specific sectors of the economy.
In that regard, the development bank would inject extra capital into the agriculture and industrial sectors.
This will empower and grow many businesses in that sectors into giant ones
ADB and NIB which were established specifically as development banks have ventured into retail banking, taking some attention from their merchant and development banking status.
World Bank approves $250m to support National Development Bank
The World Bank Board of Executive Directors have approved $250 million from the International Development Association (IDA) to support the establishment of the Development Bank of Ghana (DBG).
This will 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,” said Pierre Laporte, World Bank Country Director for Ghana, Sierra Leone and Liberia.
“The project is aligned with government priorities outlined in the Coordinated Programme of Economic and Social Development Policies and is an integral part of the World Bank Group’s efforts to promote sustainable growth in Ghana.”
Source: Joy Business