The German development finance institution, DEG, plans to commit over $270 million dollars in Ghana and three other West African economies to support bankable projects capable of generating large employments.
Last year, the bank hit its highest ever disbursement of $250 million dollars in those West African economies to reach 1.2 billion dollars investment mark for the entire African region. This was at a time that it was recovering from the effects of the financial crisis which allowed it to commit only 230 million dollars to investments in Ghana, Nigeria, Cote d’Ivoire and Senegal in 2009.
The outgoing Regional Director of DEG, Dr. Amichia Biley, told the Daily Graphic at a farewell party for him in Accra that disbursement of funds covered the real sectors of the economy, including the financial sector, telecom industry, power plants in the energy sector, as well as agriculture and agro-processing.
Dr. Biley would now head the African investment unit at DEG headquarters in Cologne, Germany. He said although the development bank had provisions for the manufacturing sector, it had not been able to support any bankable project in Ghana yet due to peculiar challenges the sector faced.
“The only sector missing in Ghana is manufacturing. This is because the sector is not growing properly as it is struggling with high operational costs, such as high cost of power and access to cheaper short-term credit,” the outgoing director of DEG, said Dr. Biley spent the last three years in Ghana to set up the DEG regional office.
DEG commits both debt and equity investments, and sometimes intermediary or bridge financing arrangements known as ‘mezzanine financing’, in profitable projects across the regions with the ultimate goal of contributing to sustainable development by helping the private sector to create jobs and reduce poverty.
Over the last three years, the development bank has been growing in the West African region at about 10 per cent in financing, while adding other countries to the traditional four. So far, Benin and Togo have been brought under the regional office in Accra.
Dr. Biley said the organization had used the last few years to properly set up the regional office; interact with partners and grow customer base in order to bring products and knowledge to the customers in the region, adding that the bank’s support for the private sector was because it was the engine of growth and the future of the African continent.
“The region is key to achieving our objectives because it boasts stable economies such Ghana which is now developing an oil sector, while cocoa and gold have been a driving force for a long time. Nigeria also has the population and the market, and these combine to make it very appropriate for the region to help us deliver on our objectives,” Dr. Biley explained.
In addition, he said the ECOWAS region was very important to DEG because the region alone accounted for about a third of the entire population of Africa.
Dr. Biley expressed the hope that the organization would commit more resources in the coming years as the private sector gears up to lead Africa’s development process in the next couple of years.
The incoming Regional Director, Mr. Andreas Voss, commended Dr. Biley and his team for laying a solid foundation and expressed satisfaction at the economic stability in the region.
“I am convinced that the work started here is sustainable and I will continue it with my team to respond to the needs of the customers in the region,” Mr. Voss said.
The farewell occasion was graced by the German Ambassador Eberhard Schanz, representatives of some of DEG’s partners, clients, sister bodies and beneficiaries of their financial interventions.
DEG, member of KfW Bank Group, is one of the largest European development finance institutions for long-term project and company financing. For almost 50 years, DEG has been financing and structuring the investments of private companies in developing and transition countries.
Source: Daily Graphic