A former Chief Executive Officer of the Bulk Oil Storage and Transportation Company Limited (BOST) Kwame Awuah-Darko has said the next government of the National Democratic Congress (NDC) will focus on building institutions that finance Ghanaian and Ghanaian owned businesses.
Banking Sector crises
In an interview with the media he stated “Page 30F of our manifesto talks about the banking crises which have affected the Ghanaian banks within the Small and Medium Enterprise(SME) space that lends to Ghanaians. So if you were a Ghanaian businessman or woman before compared to being a Ghanaian businessman or woman today, there’s a huge difference in terms of your opportunity to access capital and you can see that in the drop in volume of the business activities at the ports. And it started way back in 2018, it is not a function of COVID-19.
“The small Ghanaian middle class played with the indigenous Ghanaian banks because the multinational banks lend to foreigners and not Ghanaians. Though obviously it is Ghanaian deposits they used to lend to foreign companies. That’s one of the features of the economy. Because apart from your capital, the deposits are what you use to do business. So you have a situation today where NDC has recognized that Micro Finance Institutions(MFIs), Savings and Loans(SLs), indigenous banks have been pushed out of the system. And therefore the average Ghanaian is struggling to access capital.
Regional Development banks
Speaking on the regional banks he said:
“First of all to have a development bank, you need to have regulation for that, in their manifesto they’re pursing the normal universal banking approach. But if you want to have a development financial institution.. you have to get the bank Ghana focused on a different style of regulation. the NDC set up the EXIM bank that was supposed to finance export-oriented activities. But if you go back into our history, what we’re saying is not a new thing, the NDC has done it before. An example is ORADEP and REDICAP, at the time we didn’t have many Ghanaian that were entrepreneurial and so government decided to focus on development on the regional specific bases. However, If you want to focus on how to build this country, you have to focus on how to build regional development financial institutions.
The average Ghanaian takes about 20 to 25 years to get financial capital to live their dreams. Therefore you cannot develop a country without developing the economy, He emphasized.
Between August 2017 to somewhere 2019, the Bank of Ghana revoked the operating licenses of several financial institutions in the country citing their insolvency as the reason.
After months of clean up by government in the banking sector, a receiver appointed by the central bank announced that it has started payments of funds to all customers whose banks were affected in the process.