The Political Economy of Development Bank Ghana: Emergence and Early Years

This study provides an overview of the political economy of Development Bank Ghana (DBG) by providing insight into the emergence and early years of the bank. It explores current issues on the bank’s development mandate and its initial interventions in supporting priority sectors of the Ghanaian economy. The study highlights that DBG, through legislative instruments, operates within a specific governance structure, supervision, and regulatory framework designed by the government of Ghana and the central bank (Bank of Ghana). The operational activities of the bank include lines of credit to eligible participating financial institutions for on-lending to viable micro, small, and medium enterprises (MSMEs) and offering credit guarantees through a credit guarantee facility of PFIs. The bank is established in a fragmented political system with frequent political interventions, however, it is focused on working with development partners and stakeholders to design programmes directed at revamping priority sectors of the economy. Despite its initial interventions, the bank is faced with operational challenges, especially in line with inadequate information provided by borrowers, climate financing gaps, as well as uncertainties in the credit market.