The Finance Minister, Ken Ofori Atta has Ken Ofori Atta said that the proliferation of small banks in the country was not beneficial to the country’s growth agenda as they are constantly muscled out by the bigger multinational financial institutions that operate in the country.
He therefore suggested that in order for local banks to make a significant impact on the market and compete more effectively both locally and globally, these institutions might have to “consolidate their forces.”
According to him Ghana’s banking sector has come under the spotlight in recent months following the collapse of Capital Bank and UT Bank earlier this year and that there are other reports that a number of the other 35 banks in the country face a similar fate unless certain interventions are made to assist them.
He said: “I think it is time we took deliberate steps to build the capacity of our local banks to become major participants in this assured multi-billion dollar money market right here in Ghana.”
He also added that “But if that is to happen, our banking sector needs to grow up both literally and metaphorically. In my view, the current situation where we have an oversupply of small Ghanaian banks is not sustainable or useful to the agenda. In banking, bigger is better.
We want to see our banks talking to each other consolidating their forces to take a bigger stake in the domestic market and gather the muscle to venture beyond our borders.”
The Minister was delivering a lecture at the 3rd Aliu Mahama Memorial Lecture held at the National Theatre on Wednesday under the theme; “Transforming Ghana Beyond Aid: How We Get There.”
Ken Ofori Atta also stressed that there is the need to have a robust financial sector capable of financing the country’s transformation if Ghana indeed, is ready to take greater control of her economic destiny.
He has stressed the need of strengthening the capacity of its indigenous banks in order to drive the country towards economic development.
According to him, a concerted effort is needed to improve the country’s financial sector to enable it to support the developmental agenda of the government.
He said government will strive to reposition Ghana in the comity of nations averring that there are also plans to strengthen the banking industry to ensure that it is one of the best performing sectors in the country.
“Our banking sector needs to grow up…we want to see our banks talking to each other,” the Finance Minister said.
He said: “For the last two years alone, Ghana raised syndicated loans totaling 3.2 billion on the cocoa side. This transaction is no doubt one of the easiest and most lucrative credit facilities for the banks involved, but the syndication is done and led by non-indigenous financial houses. Not a single indigenous bank was involved in the last 1.3 billion dollar race.”
He has also revealed also that the Tema Oil Refinery (TOR) will begin full operations by the first-quarter of 2018.
TOR was partially shut down after an explosion damaged key components in January this year, limiting its capacity to refine petroleum products resulting in Ghana importing most of its refined petroleum.
According to the minister the facility is coming on stream next year, 2018, stressing the strategic role TOR can play in efforts to expand Ghana’s petrochemical sector.
He mentioned that “I’m happy to say that things are changing and latest by the first-quarter of 2018, we expect Tema Oil Refinery to run continuously again. The strategic goal is to engage local and international partners to significantly expand this refining and storage capacity. TOR has a strategic role in our petrochemical industry as it can provide a platform for the development of other related industries. Leveraging Ghana’s resources require a focus strategy that targets the benefits of specific fuels to drive growth.”
Meanwhile Ken Ofori-Atta explained that the government will not reject international assistance because of the ‘Ghana beyond aid’ policy strategy and that development assistance will continue to be welcomed but “it has to be in line with the country’s development agenda.”
According to him the aim of the new policy direction is to “shrink [foreign assistance] to its logical conclusion,” adding “Aid is one form of external influence. So we are going to be more strategic.”
It would be recalled that the President, Nana Addo Dankwa Akufo-Addo has set the agenda to wean Ghana off foreign aid through robust revenue mobilization and fiscal discipline.
In November this year when he was in London, the President revealed that Ghana will no longer want to offer the justification for those who want to be rude and abusive to Africa and her peoples.
This came to some political critics as a joke since to them; Ghana will not be able to extricate itself from donor handouts.
But the Finance Minister said the government will revamp all the sectors of the economy to build a fully-fledged middle-income country by harnessing Ghana’s resources to drive industrialization, saying that “Leveraging Ghana’s resources requires focused strategies,” he said, drawing an analogy from Moses’ encounter with the burning bush in the Bible when his staff turned into a snake.
The Finance Minister also announced plans to build an integrated aluminium industry by establishing an Aluminium Authority to oversee the industry and indicated that “The naysayers are many; the doubts were ingrained in us even at the height of the colonial era.”
By PROSPER AGBENYEGA