President of the republic, Nana Addo Dankwa Akufo-Addo, has charged the board and management of the Development Bank Ghana (DBG) to work hard in the financial service sector in order to become the bedrock for private sector development in Ghana.
Addressing participants of the ceremony to officially launch the bank today 14 June 2022, at the Kempinski hotel gold coast city, President Akufo-Addo, 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.
“Government put up an initial equity investment of 250 million United States dollars, European Investment Bank, 170 million Euros, the World Bank, 225 million United States dollars, and a 40 million United States dollars’ grant came from the African Development Bank”.
“The total committed capital to the bank, both debt and equity, is currently some 750 million United States dollars” President Akufo-Addo said.
“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 to a well-functioning, formal and strong corporates with the potential to increase our GDP, employ more people, and enhance out tax efforts” Akufo-Addo added.
DBG Partnerships
DBG, the President indicated, has a fine opportunity to nurture good relations with all of its stakeholders in order 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”.
“The bank must work with them to provide access to long term funds, access to markets, both domestic and foreign and skills development” President Akufo-Addo said.
Due diligence
Finance Minister, Ken Ofori-Atta, in his remarks noted that 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, contributing over 1.3 trillion dollars to the economy of Germany. So it is this reconstruction and growth ethos that we how to duplicate” the Finance Minister, Ken Ofori-Atta said.
Market failures
The Governor of the Bank of Ghana, Dr Ernest Addison, said in his statement that it is 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 in 2020, the bank received its license from the regulator, Bank of Ghana. DBG in essence is a commercial banking institution governed by the provisions of Ghana’s Company Act.
The Development Bank 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.
Second, empower banks and entrepreneurs through financial innovation and other advisory services to strengthen the ecosystem in which businesses operate.
Third, promote excellence within the businesses it will support, particularly in Environmental, Social, and Governance issues.