Business News of Thursday, 20 May 2021
Source: www.ghanaweb.com
2021-05-20
President Akufo-Addo (R) with President of the European Investment Bank, Dr. Werner Hoyer
• Close sources say the seed capital for the bank’s operations will be US$1 billion dollars
• It will come from development partners and other secondary donors
•The European Investment Bank agreed to contribute €170 million
A close government source has indicated that the New Development Bank Ghana (DBG) is expected to begin operations with a seed capital of about US$1 billion.
This amount is expected to come from the government, its development partners and other secondary donor institutions.
From all indications, the new development bank is going to be a wholesale bank that will raise long term funds for capital market players and other banks. It aims at helping direct credit to areas that private investors may not want to venture into due to their risky nature.
The initial agreement was that the Government of Ghana will contribute an equity capital of $250 million. Also, the World Bank agreed to contribute $250 million. Out of the $250 million from the World Bank, a portion is expected to be used to make all the necessary arrangements for the DBG to fully commence.
The European Investment Bank agreed to contribute €170 million to aid the establishment of the bank which was fulfilled on May 19, 2021.
Meanwhile, the Finance Minister during his last budget statement announced the commencement of the new development bank by the end of July this year. According to him, the government has been able to raise the seed capital of $500 million. This $500 million is the minimum capitalization that the DBG requires to kick-start its operations.