The Cabinet has approved a GH¢2.3 billion recapitalization plan for the National Investment Bank (NIB), according to the Finance Ministry’s Dr. Mohammed Amin Adam. This move is aimed at giving the state bank a new lease of life.
Dr. Adam revealed that the government would initially allocate GH¢400 million to the bank before the end of this month. He made this announcement during a media briefing in Accra on Friday, where he highlighted the government’s efforts to revitalize the bank.
The recapitalization exercise is designed to strengthen the bank’s governance structure and operational efficiency. This is crucial to ensure that the bank can effectively support the country’s economic growth and development.
NIB, established in 1963, is Ghana’s first development bank. Its primary objective is to promote rapid industrialization in all sectors of the Ghanaian economy. With branches across the country, the bank is currently facing challenges due to a lack of capital injection from the state.
Dr. Adam noted that this is not the first time NIB has faced similar challenges and required support. He emphasized the need to strengthen the bank’s governance and operational efficiency to ensure the recapitalization exercise yields the desired results.
In a related development, the Finance Minister announced that the government has initiated the Small and Medium-sized Enterprises (SMEs) and Opportunity Growth Programme. This program is expected to be launched by President Nana Addo Dankwa Akufo-Addo on July 16, 2024.
SMEs in Ghana account for 92% of existing companies, 85% of manufacturing jobs, and 70% of Gross Domestic Product. The SME Growth and Opportunity Programme aims to consolidate ongoing SME support programs and offer better-targeted support to select companies with the potential to transition from SMEs to large businesses under the ‘SME Champions’ initiative.
The program will be coordinated by the Ministry of Finance, the Ministry of Trade and Industry, the Ghana Enterprises Agency (GEA), Ghana EXIM Bank, and the Development Bank Ghana (DBG), in collaboration with Private Financial Institutions (PFIs). It will offer tailored technical and financial support to program beneficiaries.
The program framework prioritizes targeted interventions, loan recovery, technical training, and handholding support for beneficiaries. Additionally, financing instruments such as loans, equity investments, and interest subsidies will be provided through multi-faceted funding sources to create “SME champions” in the near term.
The government’s efforts aim to support the growth and development of SMEs, which are critical to Ghana’s economic prosperity. By strengthening NIB and supporting SMEs, the government hopes to promote sustainable, inclusive, and impactful growth and employment.
