The Chief Executive Officer of Sleek Garments Export Limited, Nora Bannerman-Abbott, has welcomed the government’s decision to establish what it calls a National Development Bank to specifically provide long-term financing to major sectors of the Ghanaian economy such industry and agriculture.

She said the many small, medium and even large businesses in Ghana require long-term financing to help them expand their infrastructure and boost their production capacity in order to employ more and beat competition.

Speaking during a virtual forum organised by Impact Investing Ghana and Citi TV on the theme, “What is the role of the development bank in Ghana’s economic transformation?’, Nora Bannerman-Abbott said financial support for businesses has remained a major challenge in Ghana.

She said the lending rate of banks in Ghana is very high, making it difficult for entrepreneurs to secure loans to expand their businesses.

“One of the biggest challenges for businesses in Ghana has been access to finance, and it isn’t the unavailability of finance, but the cost of it. All the banks are currently operating as universal banks and not only that, they charge such high commercial lending rates of between 25% and 33%, and so it is no wonder that so many business owners end up being scammed by ponzi schemes,” she said.

The accomplished fashion designer added that with the Africa Continental Free Trade Area (AfCFTA) coming on board, Ghanaian entrepreneurs will face very stiff competition that requires that they increase their capacity to meet international standards and demand.

For this to happen, long-term, rather than short-term financing is needed to help entrepreneurs replace obsolete equipment and expand infrastructure.

“Such investments require long-term investing. We cannot operate with the short-term finance that the banks are currently offering… AGI is very excited [about the Development Bank of Ghana]. We are happy that the government is looking at the establishment of this Development Bank of Ghana,” she noted, adding that a dedicated fund should also be created to support local businesses to stay competitive amidst the AfCFTA.