Joy Online, 1 June 2022: DBG’s arrival is timely for banks like GCB, business owners and entrepreneurs – GCB MD

The Managing Director of GCB Bank PLC (GCB), Kofi Adomako, has indicated that the arrival of the new Development Bank Ghana (DBG) is timely for banks like GCB and also for the growth of Small and Medium-sized Enterprises (SMEs) in the country.

Mr. Adomako who was speaking on the collaboration between GCB and DBG, stated that “DBG is actually not going to be a commercial bank or behave like one; rather it is a wholesale bank and will typically lend, like many other development banks, to commercial banks to intervene in markets. DBG has come at the right time in a country like Ghana. It is true we have had other banks who tried to play the role of development banks but DBG comes with a big difference. The difference DBG brings is its independence, governance and the way it was set up.”

He explained that, “the development partners that DBG brings to the market are immense. I think the Bank has come at the right time and it is going to be a different bank from what we have seen in the past. DBG is not going to compete with commercial banks but it is going to bring out the value in commercial banks in the sense that it is going to on-lend over much longer terms, in both foreign currency and Cedis which commercial banks have lacked for a long time and has stifled the growth of SMEs. So, DBG coming into the market is timely for a bank like GCB Bank. We see them as a unique partner, who will help us deepen our focus in the market and help us develop those areas in agribusiness, ICT, tourism for which much needed funding is required.”

GCB has over the past 69 years built an extensive network which has enabled it to maintain the largest SME portfolio in Ghana. Through the bank’s over 184 branches and offices, it has provided dedicated support to the sector, significantly contributing to the country’s economic development. The Bank has a Call Centre which serves as a hub for its satellite branches across the country and this ensures a good engagement with SMEs. To make the collaboration with DBG beneficial to SMEs, the Bank will have dedicated officers in its branches who will assist SME clients. This dedicated support would also be available on the Bank’s electronic channels.

According to Mr. Adomako, “GCB Bank collaborating with DBG, is an opportunity to further take advantage of our wide branch network to reach out to SMEs. The reach we bring to this collaboration is immense. Also, GCB Bank has the expertise and experience in the SME sector and has the largest SME book in this country. It is therefore an excellent opportunity to work with DBG to deepen that arrangement in terms of skills, scope and in terms of the value we bring through technical expertise, through managerial expertise and through capacity building.”

The collaboration with DBG is expected to deliver several benefits all aimed at improving SMEs. It will help share risk by channeling funds through it to GCB and to the huge SME clientele of the commercial bank. It will also offer capacity building and technical support opportunities. Ultimately it will help GCB’s SME clients benefit from support which would position them favourably to compete on the African continent on the back of the African Continental Free Trade Area (AfCFTA) and also via other trade arrangements Ghana is a signatory to. Through this opportunity, the Bank believes that its SME clients would learn how to compete better internationally and thereby improve its export potential leading to expansion and more jobs.

DBG will be launched on 14th June. It is expected to begin making loan announcements in the very near future.

Ghana Web: Kwamina Duker appointed first CEO of Development Bank Ghana

  • Bank of Ghana grants DBG operational license
  • DBG to provide access to medium and long-term loans at affordable interest rates
  • DBG commences operations with initial total funding of over US$750 million

The government has announced the appointment of finance and investment expert, Kwamina Bentsi Enchill Duker, as the first Chief Executive Officer of the Development Bank Ghana (DBG), Asaase News has reported.

The development according to the portal comes after the government through an open and competitive selection process coordinated by PwC (Ghana) has appointed a seven-member board of directors to oversee the affairs of the DBG.

Kwamina Duker however comes to the position with vast knowledge in finance and investment spanning over 30 years.

He is said to have expertise in Treasury and Foreign Exchange (FX) markets from Deutsche Bank (UK and Singapore), Nomura Bank (UK) and Midland Bank (UK).

Prior to his latest appointment as CEO of DBG, Kwamina Duker served as Managing Director of Fidelity Bank Asia which is a subsidiary of Fidelity Bank Ghana.

He was also a board member of the Consolidated Bank Ghana.

Kwamina Duker has also worked in various capacities both locally and internationally as he served as Head of Global Markets FX and Deutsche Bank (UK), a firm that had assets under management in Europe of over €122 billion.

Meanwhile, Finance Minister, Ken Ofori-Atta earlier revealed government has formally received its operational licence for the establishment of the Development Bank Ghana.

According to him, the DBG is expected to provide a powerful response to a long-standing desire of our businesses to have easier access to medium and long-term loans at affordable interest rates.

Delivering the 2022 budget statement before Parliament in November last year, Ken Ofori-Atta said, “Mr. Speaker, I have great news. On Friday, November 12 2021, The Governor of the Bank of Ghana formally handed over the license for the Development Bank Ghana.

Government appoints Board of Directors for Development Bank of Ghana

Accra, Jan. 31, GNA – Government has appointed a seven-member Board of Directors to oversee the affairs and operations of the Development Bank of Ghana (DBG).

The appointment process was through an open and competitive selection process coordinated by PwC (Ghana).

The members of the Board of Directors are Dr Yaw Ansu, Mr Stephan Leudesdorff, Mr Charles Boamah, Ms Rosemary Yeboah, Ms Mary Boakye, Mr Yaw Nsarkoh, and Ms Nora Bannerman-Abbott.

Among other responsibilities, the Board has been tasked to rapidly establish its international pedigree and to scale up its resource envelop to drive the country’s economic transformation agenda in line with the Ghana Beyond Aid.

The Ministry of Finance, in a statement, said the members were selected for their relevant qualification, diversity of experience and skills as well as integrity.

Dr Yaw Ansu, a respected Economist with over 36 years of professional experience spanning several countries, was elected as Chairman at the inaugural meeting of the Board on December 1, 2021.

“For 26 years, 1984 to 2010, Dr Ansu worked at the World Bank, holding various technical and managerial positions, including Country Director for Zambia, Zimbabwe and Nigeria, Sector Director for Human Development in Africa and Network Director and Chairman of the Sector Board for the Economists Network at the World Bank, Headquarters in Washington DC,” the Finance Ministry said.

He holds a Doctor of Philosophy (PhD), MS in Engineering-Economic Systems from Stanford University, and a Bachelor of Arts (BA) in Economics from Cornell University, in the United States of America.

The Board’s appointment was in line with the relevant sections of the Development Finance Institutions Act 2020 (Act 1032, 2020) – a provision under which the Bank is regulated by the Bank of Ghana.

The African Development Bank would have a seat on the Board while the World Bank and KfW would each have Observer status on the Board.

The Government has, over the past four years, worked with key Development Partners such as the Department for International Development (DFID), KfW, World Bank, European Investment Bank (EIB) and the African Development Bank (AfDB) in designing and establishing DBG to help address the gaps in the Ghanaian credit markets, especially the availability of medium and long-term finance for the private sector.

DBG would facilitate business growth and job creation and accelerate economic transformation by supporting the financial sector through Participating Financial Institutions (PFI’s) in both the banking and capital market industries.

The primary focus areas of DBG are agribusiness (especially, off-farm value-chain activities), manufacturing, ICT and allied services, tourism, among others, and is expected to propel economic growth, create jobs and improve domestic revenue mobilisation.

The Ministry said DBG had become a key institution to promote private sector-led growth under the Ghana CARES Obaatanpa programme – an essential element for Ghana’s economic transformation post-covid.

DBG, it further stated had commenced operations with an initial total funding of over US$750 million from Government and notable Development Finance Institutions (DFI’s).

The Government expects the Bank to use its strong financial position to support the growth of the private sector companies, create high quality jobs and enable Ghana’s private sector to compete more favorable within the African Continental Free Trade Area (AfCFTA) framework.

Ghana’s development bank needs professional, not political appointments

Ghana’s planned development bank won’t reach its full potential unless it can break with the culture of institutional appointments being used as a form of political patronage.

Ghana’s constitution gives its presidents sweeping powers over appointments. John MacDougall/AP

In May, the finance ministry agreed to a loan of €170m from the European Investment Bank (EIB) to finance a new national bank – the Development Bank of Ghana (DBG). The new institution, to be set up in July, is also backed by the World Bank and the German development bank KfW.

The new bank will aim to tackle the dearth of long-term financing for industry and agriculture. Ghana’s finance minister, Ken Ofori-Atta, says only 15% of bank loans are for five years or longer, stifling investment in long-term projects.

A history of political appointments to Ghana’s institutions needs to end if the development bank is to reach its goals. The management and boards change too often with the government, says James Dzansi, an economist at the International Growth Centre in Accra. “Appointments should not be politically motivated,” he says. “The bank should be as professionally managed as possible.”

  • Previous attempts to create specialised Ghanaian banks for agriculture and manufacturing “did not live up to expectations,” Dzansi says.  The need now is for “a broad consultation process with stakeholders” to build consensus over appointment procedures, he adds.

Such a process would be a departure from Ghana’s political culture. According to Kwame Ninsin, in Issues in Ghana’s Electoral Politics (2016), the mass redeployment of public servants after regime changes “adversely affects the capacity of the state bureaucracy and other public sector institutions.” The constitution allows the president to make an “infinite” number of appointments across national, regional and local organisations. This power means the rank and file of the president’s party become “privileged beneficiaries of financially rewarding patronage,” Ninsin says.

Proof of pudding

Dzansi is “cautiously optimistic” on prospects for the bank. The backing of the EIB will help to “derisk” the environment for private-sector investors, he says. Yet he questions whether the bank will be able to alter fundamentals that have hampered long-term private-sector investment.

Chief among them is reliable electricity supply.

  • Since 2010, Dzansi says, there has been a “very striking” correlation between increases in Ghana’s electricity supply and manufacturing growth.
  • Over-reliance on hydro-power led to a prolonged crisis in power supply, including electricity rationing, between 2012 and 2015.
  • Transmission rather than supply is the current problem, Dzansi says. “The next crisis will come from the distribution network. We need to address that very quickly.”

The development bank will be able to offer “wholesale approaches to banking problems faced by businesses” especially small businesses, says Derrydean Dadzie, a fintech consultant in Accra.

Digital banking is likely to be strengthened, with more digital financial channels and services, he says. The development bank is a “no-brainer that needs embracing by all stakeholders.”

Building a digital economy, of course, means making appointments on merit.

  • The government “seems to be aware” that the bank needs to be professionally run and that it needs to recruit internationally, Dzansi says.
  • The backing of international development banks is also positive. “These guys are going to insist on best practice,” he adds.
  • But the proof of the pudding will come when Ghana’s government changes next. The “key test”, Dzansi says, will be whether that happens without the bank’s board and management being replaced.

World Bank Supports the Establishment of the Development Bank Ghana to Boost Access to Finance and Job Creation

WASHINGTON, October 29, 2020 – The World Bank Board of Executive Directors today approved US$250 million from the International Development Association (IDA)* to support the establishment of the Development Bank of Ghana (DBG) to increase access to long term finance and boost job creation for 10,000 enterprises in key sectors including agribusinesses, manufacturing and high value services.

“By offering long-term wholesale financing, credit guarantees, and other services, the Ghana Development Finance project will help increase overall lending to priority sectors and market segments,” said Pierre Laporte, World Bank Country Director for Ghana, Sierra Leone and Liberia. “The project is aligned with government priorities outlined in the Coordinated Programme of Economic and Social Development Policies and is an integral part of the World Bank Group’s efforts to promote sustainable growth in Ghana. “

The Ghana Development Finance project is expected to increase the number of viable Micro, Small, Medium and Enterprises (MSMEs) with access to long-term financing. It will provide financial services to about 10,000 enterprises, including 2,000 women led MSMEs, and therefore contribute to economic growth and diversification. The project will also strengthen the oversight of development finance institutions and the adoption of Environmental and Social standards by financial institutions.

In addition, DBG will finance multiple interventions to attract private sector financing for credit constrained MSMEs and small companies based in Ghana. “These interventions will include the establishment of a Partial Credit Guarantee facility and a digital financing platform to leverage private sector financing by making it more efficient and less risky for private financiers to lend to MSMEs,” said Carlos Vicente, World Bank Senior Financial Sector Economist.

* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.6 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $21 billion over the last three years, with about 61 percent going to Africa.

AfDB backing for new Ghana DFI

The African Development Bank has assisted in the establishment of a new institution aimed at growing Ghana’s small businesses.

Ghana’s newly established development finance institution (DFI) has received USD 40 million in backing from the African Development Bank (AfDB).

Earlier this month the AfDB board approved the grant to aid the capitalisation of The Development Bank Ghana (DBG).

Following a couple of years’ planning, DBG has been established as part of the country’s ongoing economic transformation agenda by developing local businesses and attracting foreign investment. The new bank is designed to finance micro, small and medium-sized enterprises (MSMEs) in the agribusiness, information and communication technology, and manufacturing sectors, as well as smaller corporate entities.

AfDB director general for West Africa, Marie-Laure Akin-Olugbade said in a statement that “this institution, which will operate as a wholesale bank, using a private sector model, will provide financial institutions with long-term financing to accelerate Ghana’s industrialisation and agricultural modernisation”.

The MSME sector has been identified by many Sub-Saharan countries as an important outlet for growing and diversified economies.

AfDB country manager for Ghana, Eyerusalem Fasika said the new bank would help with the programme of recovery from the Covid-19 pandemic, through which the “expansion of access to finance for Ghanaian businesses” was “one of the key measures for economic revitalisation and transformation”.

DBG previously received USD 250 million funding from the World Bank Group’s International Development Association in October 2020. At the time, the World Bank’s director for Ghana, Sierra Leone and Liberia, Pierre Laporte said that “by offering long-term wholesale financing, credit guarantees, and other services, the Ghana Development Finance project will help increase overall lending to priority sectors and market segments”.

Earlier this year, Ghanaian President Nana Akufo-Addo planned to tackle inflation, currency depreciation, government costs, financial literacy, valuation and problems faced by MSMEs, in the hope of improving private equity investment in the country.

The funding came just a few days after the 9 November announcement that Ghana will host the next AfDB annual meeting, due to be held in May 2022.

Ghana’s 2021 budget up to USD 5 billion from capital markets. The country African Financial Markets Index, published by Absa in October, albeit against a difficult backdrop across the continent due to the pandemic.

A private investment company Fidelity Bank Ghana in August.

A new engine for Ghana’s economic transformation – the Development Bank Ghana

Loan in the amount of 46.5 million euros by German Government via KfW for the Development Bank Ghana – contract signing event held in Accra on 2nd December 2021

Kwamina Duker, CEO of Development Bank Ghana Ltd., and KfW Office Manager Arndt Wierheim

Ghana has great political weight due to its positive democratic and economic development and is considered an anchor of stability in the region. As the first country in sub-Saharan Africa to have attained independence, Ghana has managed to halve poverty within its population in 2021 compared to 1990. Notwithstanding, challenges remain- especially in the wake of the covid pandemic; jobs must be created and secured particularly for the younger generation. For this, the private sector must be better provided with long-term finance and adequate credit. Currently, less than 15% of the loans granted by banks have a maturity of five years or longer, which makes it difficult for the private sector to invest in projects with a long maturity.

The World Bank, the European Investment Bank and KfW Development Bank – among other international development institutions – have supported the Ghanaian government since 2018 in establishing a national development bank, the Development Bank Ghana (DBG).

Role model: the German promotional bank, KfW

The Ghanaian Minister of Finance, Ken Ofori-Atta, explains: “The model was the German promotional bank – the KfW Banking Group – which played a central role in the reconstruction and transformation of the German economy after the Second World War. Through DBG, the Ghanaian government will be able to further strengthen its support to the private sector to drive economic growth and transformation.”

In June 2019, a Ghanaian delegation visited KfW Banking Group in Frankfurt to gain an in-depth insight into the bank’s history, strategy and current promotional activities. “Like KfW, DBG will not provide retail or direct commercial loans, but will provide funding to existing commercial banks and other qualified financial institutions to offer long-term loans and other innovative products that are currently lacking in the market. Businesses in the agriculture, manufacturing, ICT, tourism, and home ownership promotion sectors will be particularly targeted. Project DBG is embedded in Ghana’s “build back better” efforts during and after the Covid-19 pandemic and in the country’s national long-term economic strategy.”, said Arndt Wierheim, Director of the KfW Office in Ghana.

On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), KfW Development Bank will provide debt financing in the form of a subordinated loan totaling EUR 46.5 million directly to DBG. The contract signing event was held in Accra on 2nd December 2021. In addition, German Government funds have been provided through KfW to support the Ghanaian partners in the establishment process; for example, in developing selection criteria for the partner banks, drafting the budget of the new bank and providing legal advice.

According to Isaac Hagan, KfW Project Coordinator for the Financial Sector in Ghana, “to further support the set-up of the Bank, EUR 3 million for accompanying measures (technical assistance) have also been granted by the BMZ for implementation through KfW. The accompanying measures will support the set-up of a data analytics function, train DBG staff, assist in the implementation of the Bank’s Core Banking System, advise DBG’s Management and support the set-up of a state of the art environmental and social management system (ESMS) among others.”

DBG will also receive financing through the Government of Ghana from the European Investment Bank (EIB), which has provided a loan of EUR 170 million; the World Bank, which granted a loan of USD 225 million; and the African Development Bank, which has provided a grant amount of USD 40 million to further capitalize the DBG.

“An efficient financial sector that facilitates access to medium and long-term capital at affordable interest rates is a prerequisite for sustainable growth. By providing longer-term financing through DBG, Ghanaian businesses – specifically small and medium-sized enterprises – will be able to make productivity-enhancing investments allowing them to retain and create jobs also for young Ghanaians. In this way, DBG can contribute to the recovery from the Covid-19 crisis and to economic growth in Ghana,” sums up, Lisa Stahl, who is the responsible Senior Portfolio Manager for DBG at KfW Development Bank.

Ghana: President Akufo Addo welcomes EUR 170 million EIB support for new National Development Bank of Ghana

  • EIB President confirms close relationship with Ghana and shared vision for green transition in Africa
  • Largest EIB engagement in Ghana and largest EIB backing for a national bank in Africa
  • EIB backing for National Development Bank of Ghana will accelerate economic recovery from COVID-19 and support investment and job creation by thousands of businesses
  • National Development Bank to transform long-term business financing in local currency

President Akufo Addo of Ghana, Werner Hoyer, President of the European Investment Bank and Thomas Östros, Vice President, today formally agreed EUR 170 million EIB backing for the new National Development Bank of Ghana. The EIB backing represents the largest ever engagement in Ghana by the world’s largest international public bank and most significant support for a national development institution in Africa.

Once operational in the coming weeks the National Development Bank of Ghana will increase access to long-term finance and boost job creation for thousands of businesses in key sectors, including agribusiness, manufacturing, ICT tourism and other services across Ghana.

“The European Investment Bank is a key partner for Ghana and Africa. As discussed with President Hoyer today, Ghana and the European Investment Bank share the same goals, and our close partnership will accelerate economic growth in Ghana in the future. The EIB’s backing for the new National Development Bank will support Ghana’s vision of empowering our private sector to embrace new business opportunities, create skilled jobs and successfully overcome COVID-19 challenges. The EIB’s unique technical, environmental and financing expertise is supporting priority business investment and delivering the green transition in Ghana and across Africa.” said President Akufo Addo.

“Since the start of the pandemic, the EIB has worked closely with visionary governments and private sector partners across Africa to ensure that together we can tackle the health, economic and social impact of COVID-19. Together with experts from the Ghanaian government, international financial partners and the EU Delegation in Accra the EIB is pleased to support the new National Development Bank of Ghana. The new institution will transform private sector investment across Ghana, enabling thousands of entrepreneurs and businesses to access long-term financing in local currency and strengthen resilience to COVID-19. Over the last 45 years the EIB has provided more than EUR 626 million to directly support entrepreneurs, agriculture, industry and energy investment across Ghana including the original and renovated Kpong Dam recently inaugurated by President Akufo Addo. As part of Team Europe and thanks to its local presence in Western Africa, the European Investment Bank aims to strengthen its support for ambitious investment in Ghana in the years ahead.” said Werner Hoyer, President of the European Investment Bank.

“The European Union has a long-standing partnership with Ghana and we share a broad common agenda to tackle global challenges, such as climate change and pandemics. Today’s new agreement to support the new National Development Bank of Ghana will boost private sector growth and economic resilience to COVID-19 and builds on the European Investment Bank’s enduring engagement to support high-impact investment in Ghana, in a true Team Europe spirit.” said Jutta Urpilainen, European Commissioner for International Partnerships

President Akufo Addo, Minister of Finance Ken Ofori-Atta, EU Ambassador to Ghana Diana Acconcia and President Hoyer highlighted the importance of ensuring that Ghanian businesses can access long-term financing to expand activities, harness new business opportunities and strengthen economic resilience to health and business challenges triggered by the COVID-19 pandemic at a signature ceremony in Brussels.

The announcement took place in Brussels following the African Financing Summit convened by President Macron and attended by President Akufo Addo and President Hoyer, along with heads of state and government, and international organisations from across Africa, Europe and the G7.

Enabling Ghanaian business to flourish and invest in challenging times

The new National Development Bank of Ghana will provide long-term wholesale financing, including working capital and investment loans, to the private sector through commercial banks.

The new institution will transform access to finance by small business and larger companies across Ghana and unlock investment in agribusiness, manufacturing, informational technology and tourism.

The National Development Bank of Ghana has been created by the Government of Ghana and supported by the European Investment Bank, the World Bank and the German Federal Ministry of Economic Cooperation and Development (BMZ) through the German Development Bank KfW.

Supporting green power in Ghana

Construction of the original Kpong Dam in 1976 to harness power of the Volta River was the first energy project in Ghana financed by the European Investment Bank. The EIB is now providing EUR 12.5 million for renovation of the Kpong Dam, alongside the French Development Agency, AFD.

The renovated plant will be more efficient, reliable and safe, as well as saving an estimated 400,000 tons of carbon dioxide emissions a year by contributing 1000 GWh of low-cost hydro energy a year to the national grid.

Building on 45 years of EIB engagement in Ghana

Over the last 45 years, the European Investment Bank has provided more than EU 626 million for investment by entrepreneurs, agriculture, industry and energy across Ghana.

The EIB is the world’s largest international public bank and last year provided EUR 5 billion for public and private investment across Africa supported by nine regional offices across the continent.