The national development bank is now set to take off in January next year, the Minister for Finance, Ken Ofori-Atta, has said.
Ofori-Atta said the government has been able to raise the seed capital needed for the financial institution to begin full operations.
Speaking at an employers’ meeting in Accra, Ofori-Atta said: “The establishment of the Ghana Development Bank [GDB] under the Ghana CARES programme is expected to provide support to businesses. As you might have heard, we have already raised US$500 billion for this.
“As you know, the cost of borrowing has come down. We will try to drag it down to single-digit, as your president says … the foreign exchange regime has been relatively stable and quite a miracle, especially in this year, where we had about 2.6 to 2.8%,” he said.
Presenting the Mid-Year Budget Review in Parliament on 23 July 2020, Ofori-Atta said the government is working with KfW, the World Bank, African Development Bank (AfDB) and European Investment Bank (EIB) to establish the Ghana Development Bank.
Transforming the industry
“The bank will focus on transforming the industry, agriculture, agro-processing and housing and mortgage subsectors of the economy over the medium term.” Ofori-Atta said.
He added: “It will serve as a promotional bank for the country, with a focus on mobilising medium-to-long-term funds and channelling them into the economy through the financial system as a wholesale bank.
“It will deploy products and instruments such as credit guarantee funds, refinancing of participating financial institutions’ (PFIs’) loans, term loans, business development services and factoring,” he said.
The bank is expected to source funds on the domestic, regional and international capital markets by issuing bonds, diaspora instruments and direct borrowing periodically.
The GDB is being positioned as a post-COVID-19 recovery institution, learning from the experience of institutions such as KfW and the Development Bank of Singapore, which played a critical role in transforming the economies of their home countries.