Graphic Online

Graphic Online 

Banks should take a cue from ADB

BY: Daily Graphic

The Agricultural Development Bank (ADB) was set up by the Bank of Ghana in 1965 to see to the credit needs of the agricultural sector, then the mainstay of the economy.

In 1967, the statutes establishing the bank were amended and that allowed it to add international operations, including trade financing and services, to its line of business.

Fast-forward to today and the ADB has played a pivotal role in financing agriculture and supporting farmers to keep their heads above water.

When the banking landscape became so competitive around 2003, ADB went for a universal banking licence which enabled it to deliver the full spectrum of banking services. This it has done, without shirking its core mandate of supporting the agricultural sector.

The bank is not only the lead financier of the annual Farmers Day awards and celebration but also the single largest true financier of agriculture in the country.

Yesterday, it announced that it had earmarked GH¢200 million to support the government’s flagship industrialisation policy, the one-district, one-factory programme.

The policy is not particularly new, as it was started under the Kufuor Administration around 2005. One of the things that led to its collapse in its first attempt was the lack of matching funds from the private sector.

In the first attempt, the government aimed at having three commercially viable factories in each of the then 110 districts, making about 330 factories. The downside was that the government was expected to lead the process, while the private sector joined in with investments to achieve results.

Bank financing, indeed, is very essential in every private sector-led venture.

This is why the Daily Graphic deems ADB’s gesture a step in the right direction. Access to appropriate financing is the life blood of every business and the government’s 1D1F is no different. The move by ADB is a proactive one to forestall and cure some of the things that might have militated against the first attempt to industrialise at the district level.

Even more heartwarming is the fact that the bank is also going to dedicate desks to appraise and analyse proposals that come to it for funding factories under the 1D1F programme.

We expect that other banks will take a cue from the ADB example and channel funds to the programme, so that jobs could be created in every part of the country for our teeming youth.

The time is ripe for banks to support such initiatives because, as a departure from what the country has been used to, the state will create the right environment with incentives and hands-on support, crashing all bureaucracies to ensure that the factories take off and actually succeed.

The ADB may only have seen an opportunity for ‘impact investing’ where it will make some respectable returns on investments that touch the very vulnerable in society but it could end up being one of its strong growth poles.

As the Daily Graphic commends the ADB, we also remind all that building a robust economy is a shared responsibility.

Once again, we say kudos to the ADB for a yeoman’s job.