Finance Minister, Ken Ofori-Atta has said government will fast-track the process for establishing a National Development Bank (NBD) to help in the economy’s quick recovery post COVID-19.
“We are positioning the newest Development Bank of Ghana to be a critical element of our post-recovery strategy for rapid industrialisation and agriculture modernisation, and also turning Ghana into a regional hub,” Mr. Ofori-Attta said at a ceremony last week.
The NBD is expected to be established this year, since government has secured some US$250million from the World Bank to start operations. In view of the high level of interest generated, other donors such as DfID, KFW and AfDB are expected to provide additional capitalisation for the bank once it becomes operational.
Already, feasibility studies for establishing the bank – specifying its rationale, mandate, business model, legal and regulatory framework, ownership, governance and sustainability – have been completed.
The minister told parliament last year that the NDB, as envisioned, will refinance credit to industry and agriculture as a wholesale bank; and also provide guarantee instruments that encourage universal banks to lend to these specific sectors of the economy.
He stressed that the bank, even though established by government, will be independent with a strong corporate governance framework; and will be globally rated to enable it leverage foreign capital for industrial and agriculture development in the country.
“It is expected that the National Development Bank will provide cheaper and longer-term funding for the growth and expansion of key companies operating in the agriculture and industry sectors. The development bank will also lend through specialised banks to key anchor industries at the Metropolitan, Metropolis and District Assemblies level to support government’s 1D1F initiative,” the minister noted.
According to the former investment banker, fast-tracking the bank’s establishment is part of a major economic turnaround programme the ministry will soon be presenting to the president. The programme, he said, will take insights from the Marshall Plan of Europe and Asia’s economic model and be the country’s economic path post COVID-19.
He revealed that in addition to the programme, a task force has been set up to further work on a Recovery, Stabilisation and Revitalisation Programme that will concentrate on industries and manufacturing, but with a specific focus on businesses to spur growth, minimise job losses and to ensure that the post COVID-19 recovery goes at a faster pace.
COVID-19 has wreaked havoc on global economies, and developing countries have felt the brunt of it. It is the belief and hope of the Finance Minister that there will be abundant opportunities post COVID-19, and therefore the nation must position itself to take advantage and improve micro- and macro-economic indicators as quickly as possible.
However, initial costs of the deadly pandemic to the economy – which include what the country will lose in terms of revenue and measures to contain the disease – according to him is estimated to be at least GH¢9.5billion, representing 2.5 percent of GDP.