Monday, 18 December 2017
Govt to launch National Development Bank

Govt to launch National Development Bank

By Gloria Kyeremeh
Government is to launch a national development bank with the capacity to mobilize private capital towards agricultural and industrial transformation in the country.

Mr Ken Ofori-Atta, Minister of Finance and Economic Planning revealed this during his presentation of the 2018 budget statement on the floor of Parliament, in Accra yesterday.
He said government has set-up a task force to develop a roadmap for the establishment of the bank.
He explained that a strong and efficient financial sector was fundamental to realising Ghana going beyond aid in the nearest future, adding that it would require an innovative and long term financing instruments to support economic development for higher productivity, jobs and inclusive growth.
The bank, he said was part of government’s initiatives to design the requisite financial architecture that was capable of mobilizing resources to help rapidly advance the country’s development.
Aside the development bank coming into existence, the minister indicated that government would restructure the Ghana Infrastructure Investment Fund (GIIF) with the capability to mobilise foreign private capital for critical infrastructure development using a private sector model, whiles enhancing the capacity of Ghana Exim Bank to support agriculture and industrialization for export.
“The financial sector of our country remains heavily dominated by banks. The total banking sector assets to GDP ratio as at September 2017 is 50 percent. This compares unfavourably with the total market capitalization of the Ghana Stock Exchange (GSE) to GDP ratio of 30 percent as well as the total corporate debt to GDP ratio of 0.36 percent on the Ghana Fixed Income Market (GFIM), for the same period.”
In effect, he explained that access to long-term funds by the private sector was not sufficient to drive accelerated economic growth of the country.
To address the challenge, Mr Ofori-Atta said government would strengthen the pensions, insurance and securities industries, which were the key agents of providing long term capital for the economy.

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