The argument by the Organisation for Economic Cooperation and Development (OECD) that tightening South Africa’s wealth tax regime would rebalance ... generational inequality has a fundamental flaw: it targets a “flighty” base, says an expert from the African Tax Institute.
Observers see positive signs. The bank’s board was constituted in 2021 through a process coordinated by PwC (Ghana), and the two top executives have impressive professional records. Yaw Ansu – who worked at the World Bank for 26 years and was country director for Zambia, Zimbabwe and Nigeria – is chairman of the board. Kwamina Bentsi Enchill Duker, a former director of Fidelity Bank Asia. is DBG’s chief executive officer.
Professionals, not politics
For James Dzansi, Ghana country economist at the International Growth Centre, these appointments are “welcome good news.” Amma Lartey, who heads Impact Investing Ghana, agrees: “We are very excited to see that both the board and the CEO were appointed through a competitive process,” she says.
The African Development Bank (AfDB), in its appraisal report for the project, said the bank needs to ensure transparent reporting and insulate itself from political interference. The finance ministry under Ken Ofori-Atta has given assurances that those criteria will be respected. The management team needs to be complete by the official launch in July.
With $750m raised from the World Bank, the European Investment Bank, AfDB and KfW Development Bank, among other institutions, the DBG will work to address the financing constraints faced by micro, small and medium-scale enterprises (MSME) and small corporates, by providing credit guarantees to selected financial institutions. It will target the agribusiness, manufacturing, information technology and services sectors.
Watch the transactions
The DBG is part of the Ghanaian government’s post-Covid recovery plan to empower the private sector to create jobs and stimulate growth. Companies will receive loans with maturities between three and 15 years. “Most of our loans are short-term loans. You cannot run a manufacturing plant or any agribusiness on that schedule,” Dzansi says.
He adds that the bank’s leadership must balance its assistance to businesses with ensuring its own sustainability. “The issue now will be how they will handle the exchange-rate volatility because they will borrow from the international market in foreign currencies and then sub-lend to universal banks in Ghana,” Dzansi says.
The DBG will also need to resist the pressures of competition with the private sector. “We need to see the kind of transactions the DBG begins to finance, how much risk it takes and how patient it will be,” concludes Lartey.
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