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Government involvement in the management of the yet to be launched National Development Bank will affect the bank’s progress and dilute its focus, revealed one of the main findings of research conducted by the African Center. for economic transformation.
The results also highlighted that the National Investment Bank and the Agricultural Development Bank are still influenced by government decisions.
French Development Agency Country Director Christophe Cotte said at the launch of the report that integrating foreign investors into the governance structure of development banks will help reduce political interference in their activities.
“The main thing is the governance structure of public banks; how are they organized, what are the links between public banks and the state, how the state manages its banks. I think this is the major problem we need to focus on. Now I think public banks are the model of the future.
Senior Director of Research and Advisory, African Center for Economic Transformation, Dr Edward Brown explained that the main rationale behind research design is to provide solutions to institutional credit and funding issues. financial institutions in Africa.
“Since last year, we have accepted the mandate to engage directly with the private sector to deliver a very holistic approach to economic transformation. And so looking at the private sector, we mainly focus on supporting at the political level and also directly involved with SMEs at the micro level.
“Now if you look at SMEs, after many evaluations you realize that they present their own myriad of challenges and one of them is access to finance. Looking at this, we have commissioned a number of different studies, where we are looking at how we can reduce the financing risks of the SME sector, â€he pointed out.
According to him, it is from this premise that the institute set out to probe the problems facing development banks and how they can help finance SMEs.
He added that the research has been carried out to help formulate policies to further strengthen the operations of development banks in Ghana.
Also speaking at the launch, ACET’s lead consultant Prof Joshua Abor said he was optimistic that the 2020 Development Bank Act could realign development banks to their primary focus.
Head of Private Sector Development at ACET, Charles Odoom also believes that restructuring the governance arrangements of development banks could be a first step in ensuring optimal results are obtained.
He believes, however, that the activities of the development bank need to be carefully scrutinized.
The theme of the survey was “The Political Economy of National Development Banks, AfDB and NIB in Perspective”.
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