SADA gets green light to set up bank
The Ministry of Finance has given the Savannah Accelerated Development Authority (SADA) the nod to establish a development bank that will mobilise patient capital to finance development works in the savanna zone.
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The approval from the Finance Ministry gives the authority the green light to commence preparatory works aimed at creating the institutional vehicle to accelerate growth in the zone.
The Chief Executive Officer (CEO) of SADA, Dr Charles Abugre, who revealed this to the Graphic Business at a workshop in Accra, said the authority was optimistic the bank would be ready before the end of 2018.
He added that the Ministry of Finance had also written to the African Development Bank (AfDB) to start a feasibility study on how the bank should be structured.
“The pre-feasibility study of the bank would begin this year and it will lead to a full feasibility study in 2017, and the earliest we will begin to see element of the bank coming together would be probably at the early stages of 2018,” he said.
He emphasised that the proposed bank in the savanna zone was not a commercial bank but an investment and development bank that will be empowered to mobilise long-term capital to help beat down the challenges businesses in the zone face from commercial banks.
Seed capital
On the capitalisation of the bank, Dr Abugre said projections showed that it could be within the range of US$100 million.
“We are currently far away from seed capital. You are to design how the structure of the bank would work and in what way it will work. But the reason the international financial institution are interested in spending money to design it is because they are interested in creating the framework in order to invest the seed capital,” he explained.
He indicated that the authority was seeking to set up the bank as an independent financial body with little state influence to support the savanna zone.
According to him, a number of financial institutions across the world have shown interest in the proposed bank.
Funding partners
The major funding partners will be the World Bank, African Development Bank, ECOWAS Bank for Investment and Development, the International Fund for Agriculture and Development, among others.
Private partners being sought after include the pension’s funds, private commercial banks and others.
“The Northern Savannah Zone is also exceedingly fortunate. It is an excitedly wealthy part of West Africa. It has everything,” he said, explaining that this conducive atmosphere required that SADA put in place the needed policy initiatives to support its growth.
Dr Abugre was optimistic the bank would help SADA to effectively address the three strategic objectives of mobilising human, financial and other resources for the implementation of the accelerated development strategy.
Way forward
Meanwhile, a day’s workshop on transforming the Sustainable Development Goals (SDG) into developing the savanna zone in a long-term development strategy was held in Accra.
The workshop, which was jointly organised by the Savannah Accelerated Development Authority (SADA) and the National Development Planning Commission (NDPC), brought together representatives from the public and private sectors to deliberate and effectively incorporate the SDGs into the SADA zone.
The Senior Technical Advisor of the National Development Planning Commission (NDPC), Dr Grace Bediako, has underscored the need for the country to support the commission to develop a comprehensive development plan for Ghana.
She said the 40 years development plan was almost ready for the next phase, which was the sensitisation and orientation stage in 2017.
The northern savanna zone has over 11 million hectors of land suitable for commercial agriculture. It also has most of the country’s water basins.
The zone, which represents about 54 per cent of the country’s size, has been marked as the poorest zone since independence.
According to the poverty incidence map 2005/2006, the Wa West District is the poorest with 92.4 per cent of the people living below the national poverty line.
This means 92.4 per cent of the population lives on less than US$1.90 a day according to the 2011 international prices.
The most economically active community in the area - Tamale North sub metro, has 24.7 per cent living in poverty. — GB