He said this when he presented the 2020 budget in Parliament on Wednesday.
Banking Consultant, Nana Otuo Acheampong says the National Development Bank will not replicate functions of existing state-owned banks
The Finance Minister, Ken Ofori-Atta has said that the National Development Bank (NDB) is expected to start operations next year.
However, some have wondered why the government is setting up another state-owned bank despite the many already operating in the country to perform similar functions.
Banking Consultant, Nana Otuo Acheampong, said that assertion is wrong.
Speaking to Accra-based Citi FM, Nana Otuo Acheampong, said when the NDB starts operating it will be able to finance special industries with specific financial needs which the already existing commercial banks have not been able to provide.
“This will be targeting special industries such as agric and manufacturing. Where the government feels that they need capital to be able to develop and that capital will be given as a concessionary rate so if you take an existing bank who is serving capital products at 20%, and then you come in and offer them a credit product that they should give to special industries at say 15% percent, it will be very difficult for them to forego their product and sell your product; because of that, it becomes necessary for you to create your own vehicle that you can sell your product in terms of the existing banks to targeting special industries such as agric and manufacturing as the Minister of Finance has indicated in the budget. That means it’s not going to duplicate what the existing banks are already doing theirs will be different” he noted.
The Finance Minister said the bank will be rated globally so it can leverage foreign capital for industrial and agricultural development.
The bank will be operational at a time when some local banks and financial institutions have been closed down after the banking sector clean up.
The first plan was to merge the Agricultural Development Bank, (adb) and the National Investment Bank, NIB, both state-owned banks, to form the National Development Bank. But that idea was abandoned.
This means the NDB will stand on its own while these two banks also stand on their own.
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