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29.11.2019 Business & Finance

Prof Osei-Assebey hails National Development Bank initiative with caution

By MyJoyOnline
Prof Osei-Assebey hails National Development Bank initiative with caution
NOV 29, 2019 BUSINESS & FINANCE

The decision of the government to establish a National Development Bank has been hailed by Professor Eric Osei- Assebey, an economist, on condition that it parries bad corporate practices.

It was announced at the presentation of the 2020 budget statement in Parliament by the Finance Minister, Mr Ofori-Atta, that plans are at an advanced stage to establish a National Development.

This bank, according to the Minister, will focus on industry and agriculture.

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Prof Assebey has welcomed the initiative on the grounds that it will make available long-term capital to the private sector, the engine of growth.

“Our capital market is not well developed and People do not patronise enough for firms to raise adequate finances internally,” he explained on JoyNews’ TV programme, Pm Express on Thursday.

He added that “given what is happening within the bigger real sector in the microeconomic environment, they (lenders) will not be willing to give out funds on a long-term basis. That will mean that businesses will not be able to access long-term financing to invest in the critical sectors of the economy.”

Those are views shared by a banking consultant, Nana Otuo Acheampong, who says that given the reluctance of banks to lend money to the private sector due to high-risk factor, setting up a National Development Bank “is a way of trying to help specific sectors of the economy with cheaper loans.”

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This must be done in line with best corporate governance

The saying is true, good intentions do not always produce good results unless they are backed with good efforts.

Prof. Assebey says he welcomes a National Development Bank on condition that right from its inception it addresses issues of ownership and institute good corporate governance, e nsuring that there exist good risk mitigation policies, effective liability and asset management.

“If that is the focus then we can say that it is not going to repeat the mistakes of the past,” he added.

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Story by Ghana | Myjoyonline.com

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