Ken Ofori-Atta, the Finance Minister of Ghana, in his 2022 budget statement presentation, has announced that the Bank of Ghana (BoG) has granted licence for the establishment of the Development Bank Ghana (DBG).
Presenting the 2022 Budget Statement and Economic Policy document under the theme; Building a Sustainable Entrepreneurial Nation: Fiscal Consolidation and Job Creation, in Parliament on Wednesday, November 17, 2021, Mr Ofori-Atta expressed his excitement over the establishment of the DBG. He noted that the bank will support the private sector to ease the constraints of long-term credit for growth and expansion.
“I am happy to announce the establishment of Development Bank of Ghana (DBG). Government’s intention in establishing the DBG is very clear: to provide a strong well-capitalised institution to ensure that private sector credit is enhanced on a scale that will make businesses expand; employ more people and be more competitive in the region, especially within the AfCTA framework. The DBG has received its operational license from the Bank of Ghana. The central bank has also conducted its due diligence and approved DBG’s Governing Board and key Management Personnel.”
Ken Ofori-Atta
The Finance Minister assured that government will provide a powerful response to a long-standing desire of businesses for an easier access to medium and long-term loans at affordable interest rates.
“Not only will DBG provide loans, it will also provide partial credit guarantees to complement the efforts of the Ghana Incentive-Based Risk-Sharing System for Agricultural Lending Project (GIRSAL) in agriculture.”
Ken Ofori-Atta
DBG and GAT Partnership
Mr Ofori-Atta disclosed that the new Ghana Amalgamated Trust (GAT) will partner DBG to provide patient capital and support the expansion of medium scale enterprises to build regional and global competitive Ghanaian companies.
“Mr. Speaker, following the extensive financial sector reform coupled with the establishment of the Development Bank of Ghana (DBG), the conversion of the Ghana Amalgamated Trust (GAT) into a permanent investment vehicle will now have a robust financial ecosystem that will support businesses from the early to mature stage.”
Ken Ofori-Atta
In the intervening time, DBG is expected to source funds on the domestic, regional and international capital markets by issuing bonds, diaspora instruments and direct borrowing periodically. Ken Ofori-Atta stated that that government is committed to capitalising DBG with US$250 million, of which US$200 million has already been paid. He added that, “through the effort of government, a total financing package of around US$550 million has been lined up for DBG from development partners.”
It is expected that DBG will leverage these resources to attract additional local and international capital for private sector growth and job creation.
The DBG is being positioned as a post-COVID-19 recovery institution, learning from the experience of institutions such as KfW Development Bank and the Development Bank of Singapore, which played a critical role in transforming the economies of their home countries.
DBG is primed to ease the constraint of long-term financing at competitive rates for entrepreneurs in the manufacturing, agriculture, agro-processing, ICT, and housing subsectors to propel economic growth, create jobs and improve domestic revenue mobilisation. With the recent restructuring of the sector, the financial ecosystem has been repositioned with significant depth and scope to extend the needed support to businesses.
Ken Ofori-Atta thus, averred that under the “Obaatan Pa” programme, “we expect a fully operational Development Bank Ghana (DBG) by end-December 2021.”
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