A German Delegation, led by Dr. Bärbel Kofler, Deputy Minister of BMZ (Federal Ministry for Economic Cooperation and Development), visited the Development Bank of Ghana (DBG) in the framework of the minister’s participation in the Annual General Meeting of the African Development Bank (AfDB) in her capacity as Governor of AfDB.
Dr. Kofler seized the opportunity to engage with the CEO of DBG, Mr. K. Duker.
Germany contributes to the DBG with about €50million. The Financing Agreement for the provision of a loan of €46.5million and a grant of €3million (for technical assistance) to DBG via KfW was signed in December 2021. The financing aims to contribute to sustainable inclusive growth and job creation, particularly through empowering small and medium-sized enterprises.
Dr. Kofler commended the high level of professionalism and enthusiasm with which DBG has started its operations, and revealed that Germany is indeed proud of her partnership with Ghana which manifests in the cooperation between DBG and KfW. She was confident that KfW’s rich development finance experience will benefit DBG in establishing a strong institutional foundation. DBG is modelled after KfW, and its vision is to be Ghana’s leading provider of long-term financing on a sustainable basis.
Its mission is to:
- Facilitate and strengthen currently scarce long-term credit flow to Ghanaian businesses to drive long-term economic growth;
- Empower banks and entrepreneurs through financial innovation and other advisory services to strengthen the ecosystem in which businesses operate; and
- Promote environmental, social and governance excellence within the businesses it supports.
Mr. K. Duker expressed appreciation to Germany for supporting the establishment of the bank and to KfW for making available its expertise. DBG is determined to make a difference in the financial landscape of Ghana by raising long-term affordable capital for MSMEs (micro, small and medium-sized enterprises) through its partner financial institutions. He indicated that DBG is poised for action and determined to help achieve the economic transformation needed in the country.
With DBG, MSMEs are on the verge of experiencing a turnaround in access to long-term financing, which will go a long way to transform their businesses, create decent jobs and build Ghana back better in Covid-19 pandemic era.
Germany and the Development Partners Community are very much looking forward to the official launch of DBG in June this year.
The DBG – KfW strategic collaboration
According to the Minister of Finance, Ken Ofori-Atta, “The model for DBG was the German KfW Bank – which played a central role in the reconstruction and transformation of the German economy after the Second World War. Through DBG, the Ghanaian government will be able to further strengthen its support to the private sector to drive economic growth and transformation.”
In 2019, a Ghanaian delegation visited KfW Banking Group in Frankfurt, Germany to gain in-depth insight into the bank’s history, strategy and current financing activities.
Like KfW, DBG will not provide retail or direct commercial loans, but will provide funding to existing commercial banks and other qualified financial institutions to offer long-term loans and other innovative products that are currently lacking in the market. Businesses in the agriculture, manufacturing, ICT, and high value services sectors will be particularly targeted. DBG is embedded in Ghana’s ‘build back better’ efforts during and after the Covid-19 pandemic, and in the country’s national long-term economic strategy.
In addition to the financing from Germany, the European Investment Bank (EIB) has provided an amount €170million to DBG through the Government of Ghana. The bank has also received a loan of US$225million from the World Bank and a grant of US$40million from the African Development Bank.