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US$50 million released towards operationalising development bank

Wed, 20 Jan 2021 Source: Business 24

The President’s representative at the Finance Ministry, Ken Ofori-Atta, has disclosed that US$50 million has been released towards the operationalisation of the national development bank.

The bank is expected to be capitalised with US$1 billion, of which the government has committed US$250 million.

In a speech read on his behalf by Prof. George Gyan-Baffour, the immediate past Minister of Planning, at the 72nd Annual New Year School and Conference in Accra, Mr. Ofori-Atta assured that the establishment of Development Bank Ghana (DBG) is progressing steadily.

The bank will source funding from the domestic market, as well as regional and international markets, through the periodic issuance of domestic bonds, diasporan instruments and direct borrowings from international financial institutions and capital markets.

Mr. Ofori-Atta said the bank has generated a high level of interest from international bodies such as the World Bank, European Investment Bank, KfW and DFID.

“It is expected that the combined resources of these international institutions will amount to US$558 million to support the bank by December 2021,” he said.

The bank will focus on supporting the transformation of industrialisation, agriculture, agro-processing, and housing over the medium to long term.

It will also serve as a promotional bank for the country, with a focus on mobilising medium- to long-term funds and channelling them into the economy through the financial system.

Products and instruments such as credit guarantee funds, refinancing of Participating Financial Institutions (PFIs) loans, term loans, business development services, and factoring will also be deployed by the bank.

Mr. Ofori-Atta noted that DBG was being positioned as a post COVID-19 recovery institution, learning from the experience of KfW and Development Bank of Singapore, among others, which were critical institutions for the transformation of their respective countries.

DBG will be regulated by the Bank of Ghana, with a competitively selected independent board and management.

Source: Business 24