Ghana - National Investment Bank Project

Report No. 880a-GH Appraisal of the FILE Spy National Investment Bank Ghana November 10, 1975 Development Finance Companies Department Not for Public Use Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Currency: the cedi 0) TUS$1 = A .15 $i = Us$0.87 ABBREVIATIONS ADB Agricultural Development Bank BHC Bank for Thousing and Construction CIB Capital Investment Board DSI Development Services Institute GBB Ghanaian Business Bureau GEDC Ghanaian Enterprises Development Commission MDPI Management, Development and Productivity Institute NTIB National Investment Bank OBP Office of Business Promotion FISCAL YEALR NIB: .'anuary 1 - December 31 Govemnment: Tuly 1 - June 30 This report was prepared on the basis of missions to Ghana in February - March 1975 by Messrs. A. Nespoulous-Neuville, G. Hyde and P. Edmonds, and in August 1975 by et. A. Nespoulous-Neuville.  NATIONAL INVESTMENT BANK Table of Contents Page No. BASIC DATA ....................................... i SuQal Y .... *s.......... 0... ..... .......*....... O... iii I. INTRODUCTION ..................................... 1 II. THE ECONOMY AND INDUSTRY ......................... 1 The Ghanaian Economy ........................... 1 The Industrial Sector .......................... 3 III. INSTITUTIONS FOR ASSISTANCE AND FINANCE .......... 4 Capital Investment Board ....................... 4 Management, Development and Productivity Institute .................................... 5 Ghanaian Business Bureau ....................... 5 Office of Business Promotion ................... 5 Ghanaian Enterprises Development Commission .... 6 Development Finance Department of the Bank of Ghana ..................................... 7 Commercial Banks ............................... 7 Agricultural Development Bank .................. 8 Bank for Housing and Construction .... ........... 8 IV. THE NATIONAL INVESTMENT BANK ..................... 9 Origin and Purpose .............................. 9 Short-term Objectives .......................... 9 Board .......................................... 10 Management ..................................... 10 Organization and Staffing ...................... 10 Financial Policies ............................. 11 Procedures ..................................... 12 Interest Rates and Exchange Risk .... ........... 13 V. NIB OPERATIONS AND FINANCIAL CONDITION .... ........ 13 Operations ...................................... 13 Commercial Banking .............................. 15 Portfolio ....................................... 15 Resources ....................................... 17 Financial Results ............................... 17 Financial Position .............................. 17 Auditors ........................................ 18  TABLE OF CONTENTS (Continued) Page No. VI. PROSPECTS ......................................... 18 Forecast Activity ............................... 18 Resource Position ............................... 18 Forecast Financial Results ...................... 20 Proposed Terms of Bank Loan ..................... 20 VII. CONCLUSIONS AND RECOMMENDATIONS ................... 20 Conclusions ........ ...... ....................... 20 Recommendations ............... .. ................ 21  List of Annexes Annex 1 Bve-Laws Annex 2 Board of Directors Annex 3 Organization Chart Annex 4 Summary of Operations 1970-1974 Annex 5 Cumulative Approvals by Sectors as at December 31, 1974 Annex 6 Analysis of Cumulative Industrial Approvals as at December 31, 1974 Annex 7 NIB-promoted Projects as at December 31, 1974 Annex 8 List of Companies in which NIB's Investments exceed t 1.0 million as at December 31, 1974 Annex 9 Portfolio Affected by Arrears of more than 3 months as at December 31, 1974 Annex 10 Approved Equity Investments as at December 31, 1974 Annex 11 Audited Income Statements 1971-1974 Annex 12 Audited Balance Sheets 1971-1974 Annex 13 Actual and Projected Financial Ratios Annex 14-1 Assumptions for Financial Projections Annex 14-2 Forecast of Operations 1975-1979 Annex 14-3 Projected Income Statements 1975-1979 Annex 14-4 Projected Balance Sheets 1975-1979 Annex 14-5 Projected Cash Flows 1975-1979 Annex 15 Estimated Disbursement Schedule for the Proposed Loan   - i - NATIONAL INVFSTMENT BANK Basic Data Exchange Rate: US$1 = Cedis 1.15 Cedis 1 = US$0.87 Date of Establishment: March,1963 Ownership (Share capital paid-up) is of December 31,1074 As of Sentember 1,1975 l/ ~~~ LI(0 000 % 1/ 'O___ 'o Government of Ghana 10,060 77.0 14,100 82.5 Bank of Ghana 1,500 11.5 1,500 8.7 Ghana Commercial Bank 657 5.0 657 3.8 African Managanese Co. Ltd 200 1.5 200 1.2 Morgan Guaranty Int. Fin. Co. 100 o.8 100 o.6 Standard Bank Ghana Ltd. 100 0.8 100 o.6 Barclays Bank of Ghana Ltd. 100 o.8 100 0.6 U. A. C. of Ghana Ltd. 100 o.8 100 0.6 72 small investors 243 1.8 243 1.4 13,060 100.0 17,100 100.0 Resource Position (as of December 31, 1974): Local Foreign Total Resources (