The Development Bank Ghana has denied claims of misused of funds meant for its operations by the country’s development partners.
Reacting to reports of what it termed “significant inaccuracies and falsehoods” about its activities, DBG said it is always committed to transparency and Ghana’s economic transformation.
In a news statement, DBG said it was initially capitalized with GH¢1.135 billion (about $200 million) and not $750 million in 2021 by the Government.
The capital was subsequently increased by GH¢268.60 million (equivalent to US$38.3 million at that time) from the African Development Bank (AfDB) through the Government
The bank also rejected claims that over GH¢400 million was lost through improper contracting, emphasizing its stringent procurement policies.
“This allegation does not stand up to any of the several external audits including the regulatory audit. Our procurement processes remain stringent, rigorous, and evolving in line with best global practices,” the statement said.
Furthermore, DBG dismissed claims it made GH¢700 million in losses, instead highlighting consistent annual profits since its inception, including GH¢80.1 million in 2023.
“DBG expects to end 2024 with a net profit, despite the challenging operating environment.
It said DBG also denied misusing World Bank and European Investment Bank funds, noting these credit lines were strictly monitored and used exclusively for on-lending through financial institutions.
“We take seriously the prudent use and application of funds. Again, a careful review and understanding of the operational structure of DBG will reveal that funds from the World Bank and the EIB are credit lines that are only drawn upon for on-lending in tranches, based on pipelines presented to DBG by our Participating Financial Institutions (PFIs) and approved by DBG.
It said such funds are not available for DBG to use on itself and therefore can never be used for administrative or capital expenditures or spent “like water” as alleged. The World Bank, the EIB and other providers of funds to DBG regularly monitor the use of such funds and issue reports on the results of such monitoring.
It said DBG’s governance structure had not been undermined or manipulated leading to a fight-for-turf, adding that since its creation, DBG had installed the necessary strong governance structures, systems, and processes to help assure the efficient achievement of its mandate to catalyse the economic transformation of Ghana.
These include well- defined procurement policies and processes and robust systems of internal control, including a strong internal audit function that works together with management and reports regularly and directly to the Board of Directors.
“It is important to note that the document which is the basis of the publications in the media is not an approved, final, or concluded one.
The statement said, as part of the internal audit process, this document is scheduled to be examined by the DBG Board at the next meeting scheduled for this month. In line with our commitment to transparency, we are however providing clarifications on a few of the inaccuracies published.”
Background
DBG over the past few weeks have been accused of misappropriating of funds and its procurement policies, most importantly the Over GHS400 million of US$750 million lost through improper contracting, and allegations about misuse of World Bank and European Investment Bank funds.
It has also been accused of lack of adequate transparency, with limited public information on its loan disbursements and strategy for SME support.
Additionally, ineffective governance and potential misallocation of funds, such as potential favoritism in fund distribution and difficulties enforcing governance standards add to these concerns.
Also, looking at the timing, DBG’s establishment has been questioned, given Ghana’s current economic challenges since its aim is to foster Ghana’s private sector by providing long-term capital, especially for SMEs in agribusiness and manufacturing.
