The African Development Bank has assisted in the establishment of a new institution aimed at growing Ghan…
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 announced that the government 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 included raising up to USD 5 billion from capital markets. The country performed relatively well in this year’s 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 purchased a stake in Fidelity Bank Ghana in August.
Source link : https://iclg.com/alb/17417-afdb-backing-for-new-ghana-dfi
Publish date : 2021-11-25 13:15:11