Government is coming under increased pressure to clarify why it wants to create another bank that will basically duplicate the roles of two existing banks – the Agricultural Development Bank (ADB) and the National Investment Bank (NIB).
Finance Minister Ken Ofori-Atta indicated government’s intention to launch a “National Development Bank” in his 2018 budget speech to parliament about a fortnight ago.
According to him, the new entity will have “the capacity to mobilise private capital towards agricultural and industrial transformation.”
Now, Deloitte, a globally acclaimed accounting firm, has opined in a document titled “Ghana 2018 budget commentary and Tax highlights” that government must clarify the position of ADB and NIB within such arrangement.
“It is not yet clear how the mandate of this bank would be different from the already established Agricultural Development Bank (ADB) and the National Investment Bank (NIB), which are also state-owned and set up for a similar purpose,” Deloitte noted.
Where will money come from?
With the Bank of Ghana directing existing banks to raise their capitalisation to GHC400 million by close of 2018, analysts have difficulty understanding how government will find money to set the new bank in addition to raising funds to shore up the capital bases of ADB and NIB.
Apart from that, government has had to find money, in an era where its revenue mobilisation fell short of targets, for GCB to finance its takeover of the failed UT and Capital banks.
In the last quarter, the Bank of Ghana addressed the challenge that UT Bank and Capital Bank posed to the entire banking system by facilitating a Purchase and Assumption Agreement by GCB Bank.
“This intervention was made with the clear policy intent to protect the deposit public and prevent any contagion effect on the entire industry,” the Finance Minister indicated in his 2018 budget speech.
