The National Development Bank is now set to take from January next year, Finance Minister, Ken Ofori-Atta has disclosed.
According to him, government has now been able to raise the required seed capital for the financial institution to fully begin operations.
He had earlier said in the 2020 Budget that government had secured $250 million from the World Bank as initial capital to kick-start 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 billion 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.