Government involvement in the management of the yet to be launched National Development Bank will affect the progress of the bank and dilute its intended purpose, one of the key findings from a research conducted by the African Center for Economic Transformation has revealed.
The findings also pointed out that both the National Investment Bank and Agricultural Development Bank are still being influenced by government decisions.
Country Director of Agence francaise de developement, Christophe Cotte, said at the launch of the report that the integration of foreign investors in the governance structure of development banks will help reduce the political interference in their activities.
“The major thing is the governance structure of public banks; how are they organized, what are the links between the public banks and the state, how the state is managing its banks. I think is the major issue we have to focus on. Now I think public banks are the model of the future.”
Senior Director of Research and Advisory, of the African Center for Economic Transformation, Dr. Edward Brown explained that the main rationale behind the conception of the research is to propose solutions for credit and financing challenges of financial institutions in Africa.
“From last year, we took on a mandate to engage directly with the private sector to provide a very holistic approach to economic transformation. And so looking at the private sector, we basically are focused on supporting at the policy level and also directly being involved with SMEs at the micro level.”
“Now if you look at SMEs, after a lot of assessments you realize they come with their own myriad of challenges and one of them is access to financing. Looking at this we’ve commissioned a number of different studies, where we look at how we can de-risk financing of the SMEs sector”, he pointed out
According to him, it is out of this premise that the institute engaged in probing issues facing development banks and how they can assist in the financing of SMEs.
He added that the research has been conducted to aid in the formulation of policies to further strengthen operations of development banks in Ghana.
Also speaking at the launch, Lead Consultant at ACET, Professor Joshua Abor, said he is optimistic the Development Bank Act 2020 could realign development banks back to their main purpose.
Head of Private Sector development at ACET, Charles Odoom also believes that the re-structure of the governance arrangements of development banks could be a first step in ensuring maximum results are achieved.
He however believes that, the activities of the development bank must be carefully looked at.
The topic of the survey was “The Political Economy of National Development Banks, ADB and NIB in perspective”.
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