President Nana Addo Dankwa Akufo-Addo has officially launched the Development Bank Ghana (DBG) to provide credit for the development of Small and Medium Enterprises (SMEs).
The DBG is designed to focus on economic transformation , especially industrialization and expansion of value in agriculture, and go about as an empowering agent for businesses and as a long term capital provider in the market .
DBG is structured to give loan of a $600 million to small companies in agribusinesses, assembling or manufacturing, and high-value services throughout the following one to two years, to add to the country’s economic growth
At a lauching ceremony in Accra, the President, Nana Akufo Addo noted that there was very little long term financing accessible at rates that will permit SMEs to develop.
He stated the setting up of the DBG was the aftereffect of years of painstaking effort embraced by the Government to reinforce the foundation and the transformation of the Ghanaian economy for private sector- led growth .
“It is one of numerous policy initiatives that my administration has created to assist in transforming the Ghana’s economy. The superseding objective is to make long term funding accessible to the private sector, and foster the ecosystem for market access, innovation, and advancement,” he explained.
The President expressed that the DBG, over a period, would assist in transforming the key sectors of the economy by supporting all institutions that are fundamental for SME transformation.
These sectors incorporate assembling or manufacturing, agribusiness (particularly off-farm value chain services ), ICT and allied services, the tourism industry, and the home loan or mortgage and real estate market.
President Akufo-Addo stressed that since Ghana gain Independence , efforts by various administrations to further improve access to finance and markets had not had the option to offer efficient help for private sector growth.
“Without a doubt, Development Bank Ghana ought to be the bedrock for our renew commitment to private sector development. It is normal to attempt to transform our SMEs into well-working, formal and solid corporates with the possibility to build our GDP, employ more individuals, and improve our tax efforts,” he noted .
The Bank, the President said, should be partners with the private sector , and should work with them to give access to long term funds , access to business sectors both homegrown and foreign , and skilks development.
“Development Bank Ghana will support all banks in the economy to have access to long term funds , including the National Investment Bank, the Agricultural Development Bank, and the Ghana Exim Bank. It will likewise support private equity funds , and other capital market firms to have access to our bond market, and facilitate equity financing for SMEs,” he assured .
The President expressed that the Bank will collaborate with research institutions to undertake sector research , and support innovation centres and business accelerators .
“It will guarantee that the requisite capital is coordinated towards business ideas with the most potential for development and job creation, under the financial services environment.”
The Government, the President said anticipates that the DBG should utilize areas of strength to help the development of private sector companies to assist with creating high-quality jobs and empower Ghana’s private sector to compete more favourably within the African Continental Free Trade Area framework.
He was hopeful that the bank “will assist with prodding the vision of moving Ghana “beyond aid,” and pledged his commitment that the government wouldn’t involved in the operation of the institution.
The Government is placing $250 million equity in the DBG. The African Development Bank is giving $40 million.
The World Bank, the European Investment Bank and KfW Development Bank – among other global development institutions have likewise supported the DBG
The World Bank is giving $200 million and the EIB and KfW €170 million ($177.7 million) and €46.5 million, respectively.