Development Bank Ghana accused of misusing World Bank and EIB Funds

The Development Bank Ghana (DBG) has come under scrutiny following allegations of financial mismanagement involving funds provided by the World Bank and the European Investment Bank (EIB). These accusations include claims of improper contracting and significant financial losses, among others.

In a statement cited by GhanaNewsOnline.com.gh, the World Bank reaffirmed its commitment to addressing fiduciary concerns and announced ongoing engagements with stakeholders to clarify the situation.

“The World Bank has been made aware of allegations surrounding the operation of the Development Bank Ghana, a beneficiary under the Ghana Development Finance Project supported by IDA. We take all fiduciary issues very seriously and are engaging key partners to obtain full clarifications,” the statement noted.

Meanwhile, DBG has denied the accusations, describing them as “significant inaccuracies, misleading information, and falsehoods.” The Bank assured the public of its dedication to maintaining transparency and good governance in its operations.

The allegations, which also include reported losses of GHS 700 million and an additional GHS 400 million from improper contracting, have raised concerns about the management of public financial institutions in Ghana.

Below is the Statement of Clarification Issued by the DBG on its Alleged Misuse of World Bank and EIB Funds, Losses, Improper Contracting, and Others

Recent statements made in the media regarding the Development Bank Ghana’s operations and governance have come to our attention. Considering the significant inaccuracies, misleading information, and falsehoods in these publications, we wish to provide necessary clarifications.

First, Development Bank Ghana Ltd (DBG or the Bank) was established as a wholesale Development Finance Institution (DFI) under the Development Finance Institutions Act, 2020 (Act  1032), with a mandate to accelerate Ghana’s economic transformation. By providing medium-to-long-term financing to high-impact sectors—including agribusiness, manufacturing, ICT, and high-value services, DBG is supporting the growth of Ghana’s private sector. DBG’s model and governance structure is a tried and tested one which has delivered significant performance in several countries across the world, including some in Europe.

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. 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.

False Statement 1: DBG was capitalized with US$750 million and an additional GHS1 billion. 

As can be easily verified from the publicly available audited financial statements, DBG was initially capitalized in 2021 by the Government of Ghana (GoG), with an amount of GHS1.135 billion, equivalent then to US$200 million. The capital was subsequently increased by GHS268.60 million (equivalent to US$38.3 million at that time) from the African Development Bank (AfDB) through the Government of Ghana (GoG).

False Statement 2: Over GHS400 million of the (mythical) US$750 million has been lost through improper contracting. 

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.

False Statement 3: DBG has reported losses of GHS 700 million

Again, the facts are easily obtainable from DBG’s audited financial statements. DBG has consistently reported net profits annually since its inception in 2021, as shown in table below.

Year	Net Profit Reported (GHS)
2021	53,610,000.00
2022	77,946,000.00
2023	80,114,000.00

DBG expects to end 2024 with a net profit, despite the challenging operating environment.

False Statement 4: DBG’s governance structure has been undermined or manipulated leading to a fight-for-turf between Internal Audit and Management plus an ineffective procurement process. 

In the short three years since its creation in 2021, DBG has 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.

The independence of the Internal Audit function is not only enshrined in the governance structure of DBG but is consistently and strongly affirmed by the Board of Directors. The annual work programme of Internal Audit is approved by the Board of Directors. In this regard, it is worth noting that the Procure-to-Pay audit report mentioned in the press reports was the result of the work programme approved by the Board in 2023. The Internal Auditor issued the report in July 2024 and submitted it to the Finance and Audit Committee of the Board for examination. The report was first discussed in the same month – July 2024. To complete its due diligence, the Finance and Audit Committee further requested an additional in-depth review by the Internal Auditor of certain observations in the report.  Internal Audit issued a special report from this additional review in September 2024.  Following a careful examination of all the reports and after the required interviews and discussions with management, the Finance and Audit Committee has reached its conclusions, which will be examined by the Board of Directors at its upcoming November meeting. Following its deliberations at this meeting, the Board will take the necessary decisions and actions. DBG is committed to a culture of continuous learning and growth, building on successes and of course learning from mistakes that may happen especially in these early years.

False Statement 5: DBG has misused or mis-applied funds from the World Bank and the European Investment Bank (EIB). 

DBG emphatically refutes this assertion and finds it very misleading. 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.  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.

False Statement 6: DBG spent World Bank and EIB funds on furniture and drapery for Executive Floor. 

Despite the assertions that DBG spent huge funds to upgrade furniture and drapery on its executive floor, the truth is far more prosaic. DBG took an empty concrete space on the 5th floor in the same building which houses the Bank to create Development Bank Ghana Guarantee (DBGG) and extra office space for the staff. Up to 30 percent of the Bank’s

staff had been squatting in the boardroom for months. The process aided by independent market practitioners was scrupulous in the procurement and implementation. The cost was reasonable compared to the original fit-out and other comparators. This was not the executive floor of the Bank and till date there is no such floor assigned to the executive of the Bank.

False Statement 7: DBG spent huge sums of money on its IT infrastructure. 

This assertion is misleading. A careful review of the articles establishing DBG and our mandate thereof clearly spells out a technologically enabled lean institution. The diversity of DBGs product offering requires a proper IT architecture to support efficient delivery of our mandate. Consistent with this mandate, DBG followed its rigorous procurement process to procure and implement world-class technology solutions necessary to deliver on our mandate. Contrary to the misleading statements, that the IT spend was only on core banking system, it is important to note that the IT architecture includes the following:  The Bank’s Core Banking system, Datacenter, Enterprise Resource Planning (ERP), Middleware and Security Operations Centre (SOC) among others. These were not just for the bank but rather for DBG and its envisaged subsidiaries coming online e.g., DBGG.  The requirements were therefore more extensive technically and the process for procurement was in line with the Bank’s rigorous procurement policy.

There is absolutely no truth that DBG did not follow the right procurement process. It is worth noting that DBG has approval from PPA to follow commercial procurement processes.

Selected Highlights of DBG’s Performance:

Over the three years of its operations, DBG has delivered significant performance due to a strict adherence to its mandate and the relevant governance guardrails. Working through a network of sixteen (16) Participating Financial Institutions (PFIs), DBG has disbursed loans to over five hundred (500) Micro, Small, and Medium-sized Enterprises (MSMEs) across thirteen (13) regions of Ghana. Selected highlights of DBG’s operational and financial performance include the  following:

1. Since its inception, DBG has disbursed a total of GHS1.5 billion to SMEs across thirteen  (13) regions, facilitating recovery and growth in key sectors, such as agriculture,  manufacturing, and hospitality, and supporting thousands of jobs.
2. In partnership with Cal Bank and Consolidated Bank Ghana (CBG), DBG provided a syndicated loan of GHS245.3 million in 2022 to support the hospitality sector’s recovery from the impact of COVID-19, contributing to facility expansion, job retention, and enhanced service quality.
3. Over the last two years, DBG has nearly doubled its total assets, reaching GHS4 billion in 2024, with a projection of GHS5.7 billion by 2025.
4. Key impact areas include support for women-led businesses (GHS400 million portfolios),  food security (projected GHS 400 million by 2025), climate finance (GHS41 million), and digital finance (GHS 20 million).

DBG looks forward to continuing to collaborate with our valued partners for the advancement of  Ghana’s economic transformation.

Over the coming days we shall be providing more information and also engaging key stakeholders in order to continue to address the misinformation and inaccuracies, however,  please do not hesitate to contact our Corporate Communication Office at the address below should you require any further information.

Source: ghananewsonline.com.gh