The long-standing problem of lack of patient capital faced by businesses, particularly manufacturers, will soon be a thing of the past when the Development Bank of Ghana (DBG) comes off this year, Finance Minister Ken Ofori-Atta has assured.
Speaking to captains of large producers in Accra, Mr. Ofori-Atta said the soon to be established lender will be able to lend capital for up to 15 years and will not be allowed to take deposits, in what will be a boost to the business community. “We are going to get a much more exciting environment going forward, in which we will seek to address the current challenges faced by businesses,” he noted.
Unlike a regular bank, he said, government will not repeat the same mistakes made with other state-owned lenders such as National Investment Bank (NIB) and Agricultural Development Bank (ADB); and will ensure that this time around, the new entity truly serves the industrial and export strategy of the economy by providing patient and long-term credit to businesses.
“Government decided to establish a National Development Bank as a key instrument in our pursuit of economic transformation and job creation under our overall national strategy of Ghana beyond aid,” he reiterated at the event organised by the Association of Ghana Industries (AGI).
The DBG, he further explained, will reflect new thinking on development financing as well as lessons from past experiences and current international best practices of development banking, underpinned by good corporate governance and sound business operations.
Apart from the new bank, he said, government through the Securities and Exchange Commission is working on a plan to transform the capital market space into a very viable option for businesses to raise money from.
To him, all these will encourage industry to do more in terms of expansion and job creation as they will become more competitive – especially within the context of the African Continental Free Trade Area, with an overarching goal to support economic growth.
DBG must serve industry
For his part, President of the AGI, Dr. Yaw Gyamfi, said he is confident that this time round government will get it right, and the DBG will support growth of industry and the economy at large.
“This should not be the same as NIB or ADB. We must ensure this bank [DBG] survives, because when its survives that’s the only way we are going to have long-term finance as businesses in order to bring improvement.
“For productivity to happen, we are looking forward to having a better understanding and cooperation with the bank as manufacturers or industry. So, we expect things to improve if we are able to do the right things; so every young person can have a job,” he stated. FIN