National Dev’t Bank Hits Road Next Year

Ken Ofori-Atta

GOVERNMENT
HAS announced it is working with the World Bank and other development partners
to capitalize the National Development Bank (NDB) to commence operations next
year.

Ken
Ofori-Atta, Finance Minister, disclosed this to Parliament yesterday in Accra, when
he presented government’s budget statement for 2020.

According
to him, “We have secured US$250.0 million from the World Bank as initial
capitalization to kick- start the operations of the NDB and an interim board
was set-up. In view of the high level of interest generated, other donors such
as DFID, KFW and AfDB are expected to provide additional capitalization for the
bank once it becomes operational in 2020.”

He
said the NDB, as envisioned, would refinance credit to industry and agriculture
as a wholesale bank as well provide 80 guarantee instruments to encourage
universal banks to lend to specific sectors of the economy.

“It
is expected that the National Development Bank will provide cheaper and long
term funding for the growth and expansion of key companies operating in the
agriculture and industry sectors. The development bank will also lend through
specialized banks to key anchor industries at the Metropolitan, Metropolis and
District Assemblies level to support the Governments IDIF initiative,” the minister
noted.

Banking sector condition

Commenting
on the current status of the banking sector, Mr Ofori-Atta said government had
made significant strides with the banking clean-up process which it started in
2017.

“We
have so far spent close to GHȼ13 billion to provide various bailouts to the
financial sector. In addition, government has successfully restructured the
fundraising model for the Ghana Amalgamated Trust (GAT) initiative set up to
support solvent and well-run indigenous banks to meet BOG’s minimum capital
requirement of GHȼ400 million.

“GAT has already committed funds from pension funds and other investors, through a bond programme, with proceeds of up to GH¢2.0 billion, which was used for equity investment in eligible indigenous banks, as determined by the investors. To date four banks have received support from GAT,” he added.

BY Samuel Boadi

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