Finance Minister, Ken Ofori-Atta during the presentation of the 2018 Budget in parliament last Wednesday announced that government will launch a National Development Bank to focus on the Agricultural and Industry sectors.

[contextly_sidebar id=”rA4q9ECVbKcs3oaWcLloPlfGU1PoFuXg”]Mr. Ken Ofori-Atta also stated that government is planning to launch the National Development Bank with a seed capital of 500 million US dollars.

Sources tell Citi Business News government intends to launch the bank in December or early 2018 to provide cheap credit to players in the agricultural and industrial sectors of the economy.

The adb was formed to focus on investing in the agricultural sector but the bank has seen less investment into the sector.

NIB has also struggled to fulfill its main responsibility of investing in the industry sector.

Meanwhile, Economist and Head of the Economics Department at the University of Ghana, Professor Peter Quartey has lauded government’s decision to launch a National Development Bank.

“The current system where adb, NIB are not giving the sectors the needed finance, we need to create a new bank that will serve that purpose. Ideally we should reform the existing ones but its proven difficult, therefore we need to create a new development bank that would be very focused, will have a special need, will have special focus to ensure that credit goes to agric and manufacturing and these are the two critical sectors of the economy that will create jobs for our youth,” he explained.

Prof. Quartey was of the view that the view will help address challenging of funding those sectors.

–

By: Lawrence Segbefia/citibusinessnews.com/Ghana

The post Gov’t to merge adb, NIB into National Development Bank appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to him, Government has already set-up a task force to develop a road-map for the establishment of the bank.

Mr. Ofori-Atta made the announcement during the presentation of the 2018 budget statement in parliament today, Wednesday, November 15, 2017.

Even though Mr. Ofori-Atta did not provide the exact date of the launch, he explained that the move is aimed at strengthening the financial sector of the economy to move ‘Ghana beyond aid.’

“A strong and efficient financial sector is fundamental to realizing Ghana Beyond Aid. This requires innovative and long term financing instruments to support economic development for higher productivity, jobs and inclusive growth.”

As part of efforts aimed at strengthening the financial sector, the Minister added that government will also streamline the Ghana Infrastructure Investment Fund (GIIF).

“We will restructure the Ghana Infrastructure Investment Fund (GIIF) with the capability to mobilize foreign private capital for critical infrastructure development using a private sector model,” adding that government will also “Enhance the capacity of the Ghana Exim Bank to support agriculture and industrialization for export”.

Mr. Ofori-Atta stated that, the financial sector of country remains heavily dominated by banks with the total banking sector assets to GDP ratio as at September 2017, hitting 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,” he said.

How different will the National Development Bank be?

Already, some minority MPs are questioning the need for the establishment of such a  bank, considering that the Agricultural Development Bank (Adb) and the National Investment Bank (NIB), which are also state-owned, were set up for similar purposes.

–

By: Lawrence Segbefia/citibusinessnews.com/Ghana

The post #Ghbudget: Gov’t to launch National Development Bank appeared first on Citi 97.3 FM - Relevant Radio. Always.