Gov’t will not interfere in the operations of DBG – Prez Akufo-Addo assures
President of the Republic, Nana Akufo-Addo, has said his government will not interfere in the operations of the newly launched development financial institution, the Development Bank Ghana (DBG).
Speaking at the launch of the DBG on Tuesday, June 14, 2022, the President guaranteed the independence of the Bank in its operations towards its mandate of facilitating economic transformation by providing long term finance for Ghanaian SMEs.
“So as to help drive the country’s economic transformation agenda, I would want to assure the Board of the Bank, that government will not interfere with its decision making process so as to guarantee its independence of operation and enable the Board to work more efficiently,” remarked the President.
The assurance given by the President, is on the back of research findings that political interference in development financial institutions (DFIs) usually results in the collapse or non-performance of the DFIs.
Evident of these findings can be seen in the cases of the National Investment Bank (NIB) and Agricultural Development Bank (ADB) that have failed in delivering on their core mandates.
The newly launched DBG has been created to provide access to long term finance at competitive interest rate for businesses particularly small and medium-sized enterprises (SMEs) in the country.
The DBG will focus on transforming industries, agriculture, agro-processing, and housing and mortgage sub-sectors of the economy over the medium term.
It is expected to deploy products and instruments such as credit guarantee funds, refinancing of Participating Financial Institutions (PFIs) loans, term loans, business development services and factoring, among others.
According to the Finance Minister, Ken Ofori-Atta, total available resources for the Bank in both equity and debt is currently about $750m.
Equity commitment from the Government of Ghana is $250m out of which $200m has been paid, while the German Government through Kfw has given DBG a subordinated debt of 46.5m Euros and an additional 3m Euros grant for Technical Assistance.
The World Bank and EIB have given the Bank $225m and 170m Euros respectively. AfDB have also given the Government $40m grant which has been given to the Bank as equity.
