The institution of strong corporate governance structures has been highlighted as one of the many critical things that need to be in place to ensure the success and longevity of the yet to be launched Development Bank Ghana (DBG).
The remarks were shared as part of a virtual forum organized by Impact Investing Ghana in collaboration with Citi FM and Citi TV, on the DBG and its role in Ghana’s Economic Transformation agenda.
The new Development Bank Ghana is a wholesale and non-deposit taking bank which is expected to increase access to long-term finance and boost job creation for thousands of businesses in key sectors, including agribusiness, manufacturing, ICT, tourism and other services across Ghana.
But according to Banking consultant Dr. Richmond Attuahene, to avoid the failures of past development financial institutions, the subject of good corporate governance cannot be over emphasized.
“According to the World Bank, you need to put very good corporate governance systems in place which make room for independent directors. I’m not saying government should not have people on the board, but we should have the best businessmen and women who really understand the mandate and the workings of the DBG. If not, we will only repeat the failings of the past.”
Speaking on the same virtual forum, the Director of the Financial Sector Division of the Ministry of Finance Samson Akligoh enumerated a number of steps being taken to ensure the DBG stays on the right path.
“The DBG is going to have over 60% independent directors. As part of policy, the Ministry has taken steps to ensure all the board members are independent. We are doing that because we want to learn from our past mistakes. Another key thing is that the board and the management are being selected through a very competitive process and not through political appointments.”
On her part the CEO of Sleek Garments Export Ltd and ASICT, Madame Nora Bannerman-Abbott welcomed the setting up of the DBG especially in an era of the African Continental Free Trade Area (AfCFTA) but insisted that the high cost of credit more than anything needs to be looked at.
“One of the things we need the most as businesses in this country is to continue to expand our production capacities. The AfCFTA brings opportunities, but now we have competition knocking at our doors, and one of the biggest challenges for businesses in Ghana had been access to finance. It isn’t the unavailability of finance, but the high cost of finance. Because all the banks are currently operating as universal banks, and not only that, but they charge such high commercial lending rates of 25% to 33%.”
The virtual forum also saw speakers such as Alex Asiedu of Impact Investment Ghana (IIG), and Jerry Parkes of Ghana Venture Capital Association, sharing their take on what needs to be done to ensure the success of the DBG.