World Bank Initiates Investigation into Allegations Involving Development Bank Ghana

The World Bank has responded to allegations of financial misconduct at Ghana’s Development Bank (DBG), supported by the International Development Association (IDA), emphasizing its serious stance on fiduciary issues. In a statement, the World Bank acknowledged awareness of claims regarding misuse of funds at DBG and confirmed that it is working with relevant partners to clarify the situation.

DBG has been accused of misusing funds from both the World Bank and the European Investment Bank (EIB), incurring losses of GH₵ 700 million, and engaging in improper contracting practices, allegedly leading to a loss of GH₵ 400 million.

However, DBG has issued a rebuttal, describing the allegations as inaccurate, misleading, and false. The bank clarified that it was established under the Development Finance Institutions Act of 2020 to support key sectors of Ghana’s economy, including agribusiness, ICT, manufacturing, and high-value services. DBG reiterated that it had been initially capitalized with GH₵ 1.135 billion from the Government of Ghana, not the falsely reported US$750 million. Additional funding was secured from the African Development Bank.

In response to claims of financial loss, DBG cited external and regulatory audits which disproved the allegations, affirming that its procurement processes align with global best practices. The bank also countered accusations of GH₵ 700 million in losses by presenting audited financial reports showing consistent annual profits since its establishment in 2021.

DBG also addressed claims of governance issues, asserting the strength of its internal control systems and the independence of its audit function. The bank emphasized its transparent handling of funds from the World Bank and EIB, noting that these funds are only released for on-lending through participating financial institutions and cannot be used for internal expenses.

DBG further refuted reports that it had spent lavishly on executive office furniture and IT infrastructure, clarifying that office space was developed for staff expansion, and technology investments were necessary for the bank’s operations, including its core banking system, enterprise resource planning, and security systems.

DBG highlighted key milestones, including the disbursement of GH₵ 1.5 billion in loans to over 500 MSMEs across 13 regions, supporting recovery in sectors such as agriculture and hospitality. The bank’s total assets have nearly doubled since 2022, with projections to reach GH₵ 5.7 billion by 2025.

DBG expressed its commitment to transparency and economic transformation, promising to engage stakeholders and correct any misinformation regarding its operations. The World Bank continues to monitor the situation closely.

Source: The High Street Journal