GHANA – The Government of Ghana has secured US$250 million from the World Bank as initial capitalization to kick-start the operations of the National Development Bank.
Ghana’s Finance Minister, Mr. Ofori Atta revealed this while delivering the 2020 budget statement to Parliament adding that Bank is expected to commence operations in 2020.
Once operational, the bank will provide access to cheaper and long-term funding to some key companies operating in the agriculture and manufacturing sectors.
The Finance Minister also revealed that the soon to be set up Bank had generated a lot of interest from other international donors.
“In view of the high level of interest generated, other donors such as DFID, KFW, AfDB are expected to provide additional capitalization for the Bank once it becomes operational in 2020,” said Mr. Ofori Atta.
“The National Development Bank as envisioned will refinance credit to industry and agriculture as a wholesale bank, and also provide guarantee instruments to encourage universal banks to lend to these specific sectors of the economy,” he added.
Like in many African states, agriculture is the backbone of Ghana’s economy employing over 50 % of the country’s total labor workforce.
Agriculture also contributes to about 54% of Ghana’s GDP, and accounts for over 40% of export earnings, while at the same time providing over 90% of the food needs of the country.
Providing access to cheap and long-term funding to this critical sector of the country’s economy will thus have a significant effect especially in adding value to the country’s exports and providing additional employment opportunities to citizens.
Mr Ofori-Atta said the government will also provide periodic dedicated funds for intervention in key areas of the economy such as large scale agro-processing and housing for economic and social development.
The Bank according to Mr. Ofori Atta, is expected to act as an independent institution with a strong corporate governance framework.
It will also be globally rated to enable it to leverage foreign private capital for industrial and agriculture development in the country.