It makes sense to merge ADB with NIB - BoG Governor

By: Daraja Mutari

27th November 2017

Share:

The Governor of the Bank of Ghana, Dr Ernest Addison, says “it makes sense” for the government to combine the Agricultural Development Bank (ADB) with the National Investment Bank (NIB), citing the challenge of recapitalsiing two banks to GH¢400 million by December 2018.

He said any attempt to merge the largely state-owned ADB with NIB, a wholly owned state bank, “could be consistent with the new requirement for the banks.”

“To the extent that ADB has to raise GH¢400 million and NIB has to raise GH¢400 million and the fact that government has fairly large shares in both banks (means that), it makes sense to start thinking of consolidating and I don’t see any difficulty with that,” Dr Addison said at a press briefing Monday.

He was reacting to recent announcements by Finance Minister, Mr Ken Ofori-Atta, that the government could consider merging ADB with NIB to form the proposed National Development Bank (NDB).

The NDB, expected to start operations with US$500 million stated capital, is meant to bridge the funding gap facing businesses in the agricultural and manufacturing sector.

It is expected the bank will be empowered to source foreign, long term and patient capital for unlending to businesses in these two sectors.

Beyond serving this purpose, which has been the bane of the private sector, Dr Addison said it could amount to a smart move by their common shareholder to scale over the recapitalization directive issued in September.

The directive by the central bank requires all the banks in the country to recapitalise to GH¢400 million, up from the current GH¢120 million.

The government, together with other state institutions, owns a total of 51.8 per cent of ADB.

Source: graphic.com

Visit The Ghana Guardian News to comment on this article