At long last, President Nana Addo Dankwa Akufo-Addo launched the operations of the Development Bank Ghana (DBG) yesterday.
This is a bank established in 2017 and received in 2020 its licence from the regulator, Bank of Ghana, in essence, as a commercial banking institution.
The launch of its operations now makes it a typical development bank, a distinct entity from a commercial bank.
According to the available information, commercial banks are organised to perform public utility banking services, such as accepting deposits and lending money, whereas development banks are multi-purpose financial institutions set up to provide financial aid to the industrial and agricultural sectors of the economy, to encourage development.
Development banks are therefore key players for development by providing long-term financing, particularly to the private sector and state projects focused on physical development.
The President’s encouragement to the bank to be the bedrock of the country’s renewed commitment to private sector development is therefore given in the right context.
Thus, it is expected to work to transform the small and medium enterprises (SMEs) in the country to well functioning, formal and strong corporate entities with the potential to increase Gross Domestic Product (GDP), create more jobs and enhance tax efforts.
What President Akufo-Addo has said is clearly the vision the government and, for that matter, the whole nation have in mind with regard to the operations of the newest public bank in the country today.
The preoccupation now should be how to realise that vision and sustain it till thy kingdom come.
To this end, the bank’s workers and board should bear in mind and be guided by regulations, best practices, success stories and the need to make the best out of circumstances of the moment.
It cannot be the case that the KFW financial institution in Germany has not experienced precarious situations since its establishment in the 1950s, yet the institution that might have spent about USD$1.2 billion dollars at its inception is today touted to be contributing over $1.3 trillion to the economy of Germany.
How did the KFW do it? This is a success story worthy of emulation.
Obviously, it followed all the best practices, including due diligence in all situations and forged partnerships like what has been suggested to the DBG.
President Akufo-Addo says the DBG has a fine opportunity to nurture good relations with all of its stakeholders in order to provide long-term financing to them as well as facilitate their ability to access both domestic and foreign markets.
It is expected to focus on finding ways to address market failures and meet gaps in the Ghanaian credit markets.
Besides, it has to promote excellence within businesses and support particularly environmental, social and governance issues.
Apart from these, the DBG is expected to align with other development finance institutions (DFIs) to be licensed later to help address market failures in Ghana’s credit markets.
DFIs are said to have the potential to help channel private investments into new technologies and help emerging markets accelerate their efforts to achieve development goals.
The President and others have given the clue; DBG must leverage every opportunity for progress, progress that has growth implications for SMEs to contribute their full potential to the country’s economic growth and related development.
Dishonesty, all manner of corrupt practices, negligence, recklessness, nepotism, to mention a few, must not be associated with DBG.
The DBG must be an exemplary success story to attract investors to support its operations for the full benefit of the country.