Development Bank Ghana will provide financing to support key sectors of the economy – BoG

Dr Ernest Addison12121212 Governor of Bank of Ghana, Dr. Ernest Addison

Wed, 15 Jun 2022 Source: www.ghanaweb.com

The Bank of Ghana (BoG) has reiterated the importance of a development bank to a country’s financial sector.

In a speech during the formal launch of Development Bank Ghana (DBG) on June 14, the Governor of the Central bank, Dr. Ernest Addison observed that national development banks played active roles in mobilizing public and private sector resources to support critical economic sectors.

He further noted that banks and other Specialized Deposit-taking Institutions (SDIs) concentrate on short-term financing support to businesses to the detriment of finance for long-term projects which could serve as catalysts for development.

According to him, this has warranted the establishment of development banks to provide key financial support to other sectors of the economy.

“Available data show that less than 15 percent of loans granted by banks are for 5 years or longer, making an investment in long gestation projects, especially for Small Medium-sized Enterprises (SMEs) unviable.

“Also, the share of bank credit to the agriculture and manufacturing sectors hover around 4 percent and 8 percent, respectively. This data shows that only a small share of lending goes to key sectors such as agriculture and manufacturing relative to their shares in GDP and employment.

“This, therefore, necessitates the establishment of modern market-oriented development finance institutions, which will focus on providing medium to long-term financing to support key sectors of the economy. This is what DBG brings on board,” Dr. Ernest Addison said.

President Nana Akufo-Addo formally launched the $750m Development Bank of Ghana on Tuesday, June 14, 2022, to help spearhead the vision of a Ghana Beyond Aid, which entails positioning the private sector to take the lead in our country’s socio-economic transformation and create quality jobs for the youth.

The bank will help transform the key sectors of the economy, over a period of time, by supporting all institutions that are essential for SME transformation.

Read below the full speech of Dr. Ernest Addison

Source: www.ghanaweb.com
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