President Nana Akufo-Addo formally launched the Development Bank of Ghana on Tuesday, June 14, 2022, to help spearhead the vision of a Ghana Beyond Aid, which entails positioning the private sector to take the lead in our country’s socio-economic transformation and create quality jobs for the youth.
Speaking at the event which took place at the Kempinski Hotel, Accra, President Akufo-Addo stated that “today’s event is the culmination of years of painstaking efforts undertaken by the Akufo-Addo government to strengthen the infrastructure for the transformation of the Ghanaian economy for the private sector-led growth.”
According to the President, the idea of setting up a Development Bank was announced in the 2017 Budget Statement and Economic Policy when he first assumed office.
“It is one of many policy initiatives that my government has come up with to help transform the Ghanaian economy. The overriding objective is to make long-term funding available to the private sector, and develop the ecosystem for market access, technology and innovation,” he said.
The Development Bank’s focus, the President said, is to help transform the key sectors of the economy, over a period of time, by supporting all institutions that are essential for SME transformation.
These sectors include manufacturing, agriculture (especially off-farm value chain activities), ICT and allied services, tourism, and the mortgage and housing market.
President Akufo-Addo explained that since Ghana attained independence, efforts have been made to improve access to finance and markets, with earlier attempts resulting in the creation of the National Investment Bank and the Agricultural Development Bank.
However, these institutions have not succeeded in delivering on the promise of systematic support for private sector growth.
It is for this reason that the Ministry of Finance had extensive technical engagements with KfW in Germany, and other multilateral institutions like the European Investment Bank, the World Bank and the African Development Bank to mobilize international funding, diversify its shareholding and institute the best practices to have an independent Board and a financially sustainable institution.
“Accordingly, Government put up an initial equity investment of two hundred and fifty million dollars ($250 million), the European Investment Bank €170 million, World Bank $225 million, and a US$40 million grant came from the African Development Bank. The total committed capital to the Bank, both debt and equity, is currently some US$750 million,” he said.
President Akufo-Addo continued, “Undoubtedly, Development Bank Ghana should be the bedrock for our renewed commitment to private sector development. It is expected to work to transform our SMEs into well-functioning, formal and strong corporates with the potential to increase our GDP, employ more people, and enhance our tax efforts.”
Work with Private Sector
The Bank, the President said, must be partners with the private sector, and must work with them to provide access to long-term funds, access to markets both domestic and foreign, and skills developments.
“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 also support private equity funds, and other capital market firms to have access to our bond market, and facilitate equity financing for SMEs,” the President assured.
Additionally, he stated that the Bank will partner with research institutions to undertake sector research, and support innovation centres and business accelerators, adding that “it will ensure that the requisite capital is directed towards business ideas with the most potential for growth and job creation, under the financial services ecosystem”.
With the Board of Directors of the Bank is chaired by Yaw Ansu, a well-known economist, and a former senior World Bank executive, and Mr. Kwamina Duker, who has some 30 years of experience in leadership in financial institutions in several parts of the world, serving as the first Chief Executive (CEO) of the Bank, the President stated that the selection process for the CEO and senior management of the Bank has been rigorous, focused and transparent.
He explained that PricewaterhouseCoopers identified, screened and interviewed 125 candidates, who responded to domestic and international advertisements.
“This was guided by the selection matrix approved by the Search Committee. PricewaterhouseCoopers, after the screening and interview process, presented a list of 27 candidates, with three candidates for each matrix for the Search Committee’s consideration. The Search Committee subsequently interviewed, and ranked the three selected candidates for each matrix based on the experience of these potential candidates,” he added.
The government, the President said expects the Development Bank Ghana to use its strong financial position to support the growth of private sector companies to help create high-quality jobs, and enable Ghana’s private sector to compete more favorably within the African Continental Free Trade Area framework.
“The Board has been tasked to scale up the Bank’s resource envelope so as to drive the country’s economic transformation agenda and entrench the institution’s international pedigree. I want to assure the Board of the Bank that Government will not interfere in its decision-making process, so as to guarantee its independence of operation, and enable it to work professionally and efficiently in the larger interest of its overarching objective of helping drive private sector-led growth of our national economy,” he added.