2018 Budget: Gov’t To Launch National Development Bank
The Finance Minister, Ken Ofori-Atta, has announced that government will launch a National Development Bank, with the capacity to mobilize private capital towards agricultural and industrial transformation.
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.