The Ghanaian government, funded by the World Bank with US$250million and with more expected from other donors, is about to establish a new state bank known as the National Development Bank (NDB).
The National Development Bank is expected to be an independent institution that would be globally rated to enable it leverage foreign private capital for industrial and agriculture development in the country.
This was announced by the country’s Minister of Finance, Ken Ofori-Atta during the presentation of the 2020 Budget. The minister said that the new bank will provide cheaper and long-term funding for the growth and expansion of key companies operating in the agriculture and industry sectors.
“We have secured US$250million from the World Bank as initial capitalization to kick-start the operations of the NDB and an interim board was set-up. 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 One District One Factory initiative.
The Government will also provide periodic dedicated funds for intervention in key areas of the economy such as large scale agro processing, housing, through various schemes and funds as needed for economic and social development and jobs,” he said on the floor of parliament.
Economist at the Institute of Fiscal Studies (IFS) Dr. Saed Boakye has lauded the move as one that would benefit the country but cautioned that management of the bank should not be politicized, else it will fail to achieve its purpose.
“Development banking is very crucial for developing countries in Africa. But the problem is, we know how public institutions are managed over here. So if we set up a new development bank and we don’t strengthen the management capacity, put in place checks and balances, make sure that those who are qualified run the bank and not party faithful, it will fail,”