Development Bank Ghana to Invest GH¢1bn in Key Economic Sectors

Development Bank Ghana (DBG) is set to channel GH¢1 billion into the nation’s economy this year by providing funds to commercial banks and other financial institutions for on-lending to pivotal sectors. This initiative aims to bolster long-term economic growth across various key areas, including agriculture, manufacturing, ICT, and high-value services.

Kwamina Duker, the Chief Executive of DBG, shared this ambitious plan during an interview with JOY BUSINESS in Washington DC, where he was attending the Annual IMF/World Bank Spring meetings. “Since we started operations, we have advanced $1.0 billion through our participating financial institutions to the private sector, and we intend to increase to $2.0 billion before the end of this year,” Duker stated, highlighting the bank’s commitment to expanding its impact on Ghana’s economy.

The DBG, which was established in 2020 and launched full operations in 2022, has quickly become a pivotal player in the financial landscape, focusing on areas that traditionally lacked sufficient financial support. The bank is jointly financed by the Ghanaian government and international partners including the Federal Ministry for Economic Cooperation and Development of Germany through KfW, the World Bank, the African Development Bank, and the European Investment Bank.

Support for the Agricultural Sector

One of the significant announcements made by Duker was the targeted allocation of funds to boost the agricultural sector. Out of the GH¢1 billion earmarked for disbursement in 2024, 25% to 35% is designated specifically for agriculture. This focus is part of a broader strategy to transform Ghana’s economy through enhanced food security and agricultural productivity.

Duker explained, “Our focus is primarily on agriculture, and that is why we are working with the Ghana Incentive-Based Risk Sharing System for Agricultural Lending (GIRSAL) to help deal with funding challenges in the sector.” This collaboration is expected to address some of the persistent barriers to financing in agriculture, enabling more sustainable and effective support for farmers and agricultural businesses.

Impact Financing

In addition to providing funds, DBG is committed to ensuring that these investments achieve tangible impacts. The institution has implemented robust measures to ensure that funds are directed to the right sectors and that they contribute to substantial economic and social benefits. “We are not lending for lending’s sake but rather lending with purpose and targeting bankable deals,” Duker emphasized, underscoring the strategic approach taken by DBG to financial support.

This methodical strategy aligns with DBG’s broader objectives to fuel prosperity and unlock the potential of Ghana’s economy by providing financial support and expertise through participating financial institutions. By focusing on sectors that are crucial for development but have historically been underserved, DBG aims to catalyze significant economic transformations.