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Mr. Ken Ofori-Atta, Minister of Finance
The World Bank’s Board of Executive Directors approved a $ 250 million financing package for a new development bank in Ghana, as part of the Ghana Financing for Development Project, aimed at increasing access to long-term finance in the country.
A press release from the World Bank said that, once established, the Development Bank of Ghana (DBG) is expected to drive job creation for 10,000 businesses in key sectors including agribusiness, manufacturing and high-value services.
The International Development Association (IDA), a member of the World Bank Group, which offers grants and low-interest loans to developing nations, will provide the credit to the government of Ghana to help launch the project.
The World Bank Country Director for Ghana, Mr. Pierre Laporte, said DBG will offer support through long-term wholesale financing, credit guarantees and other 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 Mr. Laporte.
“The project is aligned with the government priorities outlined in the Coordinated Program 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 World Bank said the Ghana Financing for Development Project is expected to increase the number of viable Micro, Small, Medium Enterprises and Enterprises (MSMEs) with access to long-term financing in the country.
It will also provide financial services to some 10,000 businesses, including 2,000 women-led MSMEs, while strengthening the supervision of development finance institutions and the adoption of environmental and social standards by financial institutions.
Additionally, DBG will fund multiple interventions to attract private sector financing for Ghana-based MSMEs and small businesses with credit constraints.
“These interventions will include the establishment of a partial credit guarantee line and a digital financing platform to leverage private sector financing by making it more efficient and less risky for private financiers to grant loans to MSMEs,” said Carlos Vicente , the Senior Financial Sector of the World Bank. Economist.
Promotional bank
The decision to establish the DBG was first mentioned by the Minister of Finance, Mr. Ken Ofori-Atta during the presentation of the mid-year review of the Budget and Economic Declaration 2020 to Parliament in Accra on July 23, 2020. He noted that the DBG would serve as a promotional bank for the country when established.
He said he would focus on mobilizing medium to long-term funds and channeling them into the economy through the financial system as a wholesale bank.
“Mr. President, the government is working with KfW, the World Bank, AFD and the European Investment Bank (EIB) to bring the Development Bank of Ghana (DBG) into operation by September 2020.
“The bank will focus on transforming the industry, agriculture, agribusiness and housing and mortgages subsectors of the economy in the medium term.
“It will serve as a promotional bank for the country, with a focus on mobilizing medium and long-term funds and channeling them into the economy through the financial system as a wholesale bank,” he said.
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