Despite the huge debts cited in its operations by the Auditor General’s report, the Savanna Accelerated Development Authority (SADA), has been cleared by the Finance Ministry to establish a bank. According to the Authority, the bank, to be named Savannah Investment and Development Bank, will be lending to local groups such as farmers.
SADA late last year, hinted at plans to establish a bank this year for the accelerated growth in the savanna zone with a startup capital of $100 million. Speaking to Citi Business News on the latest development, the Chief Executive Officer of SADA, Charles Abugre emphasized that the bank will seek to expand economic activities in the Northern horizon.
“We are looking at different ways to do this. One way that we have been flagging is the idea of creating a financial institution. We call it the Savannah Investment and Development Bank.
Fortunately after discussions with the Ministry of Finance, they have given us a no-objection to pursue the idea, meaning all the idea is sensible,” he said.
Mr Abugre further stated that there are some investors who are willing to invest in the new project, stating they have confidence in the project. “A number of development partners are very interested in the idea.
And one of the ways in which it is crystallized is to create what you call a wholesale bank,” he said. He explained that as part of the activities of the bank, it will raise money from international capital markets in the long term and lend them to existing commercial banks, as well as savings and loans companies.
He stated that the bank will provide an opportunity for the first time to farmers to procure loans for five to six years to enable them to buy tractors.
According to him, the bank will constitute 20 percent government, and 80 percent private equity with funding partners expected to come from the World Bank, African Development Bank, ECOWAS Bank for Investment and Development, the International Fund for Agriculture and Development among others. “We don’t have long term and medium term loans.
It is all very short term which makes businesses very difficult to do. Those who want to establish motels and hotels across the SADA zone, for example, will have no worries,” he said. PAC summons SADA Meanwhile the Public Accounts Committee on Monday summoned SADA to clarify issues of financial impropriety that have saddled the Authority.
Some of the Audit findings SADA is being held accountable for include failure to recover a one million dollars advance granted to Human Construction Engineering group, wasteful expenditure of about 187000 cedis on a trip to turkey and GHC69000 on an unapproved trip to Birmingham and Berlin, among others.