An investment banker and Chief Executive Officer of the Gam-Ank Group, Dr Sam Ankrah, has criticised the banking industry’s silence over the continuous investment of the country’s oil revenues abroad, describing it as a clear manifestation of their inability to take a leadership role in the economy.
With a housing deficit that is estimated at two million units, Dr Ankrah said banks could have put pressure on the government to amend the necessary legislations and repatriate the oil savings back home to be used to fund housing development and repay through rentals.
“With an estimated rental income of US$100 per month that can rake back into the Stabilisation and Heritage Funds, a whopping US$24 million annually and more to establish a sustainable cash flow for the managers of our economy and the national budget. This can be repeated in other sectors of the economy without the need for the International Monetary Fund (IMF) assistance,” Dr Ankrah said at the 14th Ghana Banking Awards held in Accra on August 29.
Dr Ankrah, who is also the Chief Executive Officer of Africa Investment Group, was the guest of honour on the awards night; an annual event organised by Corporate Initiative Ghana (CIG) with support from the Graphic Business, and aimed at rewarding excellence in the local banking sector.
This year’s event was on the theme: 'Identifying and rewarding excellence in the banking services proposition.'
Idling opportunities
The Stabilisation and Heritage Funds have so far accumulated up to US$450 million in savings and returns.
The two funds hold the country’s oil savings earmarked for posterity and budget stabilisation purposes. The rate of returns on them is less than three per cent per annum, an amount Dr Ankrah said was discouraging.
Beyond that, he said, recent developments in the economy – the heightened public borrowing at high rates, the economy’s dire need for capital and the influx of American and European investors into Ghana – required that the country changed the necessary laws to repatriate the funds back home.
“But these decisions can only be influenced when banks take their rightful leadership role,” he said at the event which was graced by executives in the sector.
Over the years, Dr Ankrah said, banks had failed to operate out of their comfort zones and tackle the country’s economic challenges head-on.
Instead of aggressively supporting businesses with capital to grow and develop the economy, he said, banks had long used risk as a reason to shy away from profitable ventures which needed their support to contribute meaningfully to nation development.
The result, he said, was the series of opportunities in the economy which ultimately reinforced banks’ “commitment to the policy of ‘zero risk’ in an economy that has a large and vibrant sector of ‘petty trading.’”
“In my view, our sector has over the years largely shied away from the pioneering and adventurous spirit that built the so-called ‘tiger economies’ that most of us seem to admire so much. We have not invested enough confidence in ourselves to the extent that a number of us still seek offshore approval for even unpretentious investment proposals from indigenous clients,” he said.
In addition to the issue with the petroleum funds, Dr Ankrah said considerable business opportunity also existed in the Students’ Loan Scheme, where a consortium of banks could have grabbed and leveraged to fund businesses.
The Gam-Ark said banks had failed to inspire the confidence needed to develop the economy; something he said was directly related to the industry’s inability to take up the leadership role.
“It cannot stand to our credit as bankers that after more than half a century of political independence, this country still has no difficulty in accepting being called a developing country. Banking, in my humble view, is a futures industry and should, therefore, consider itself as one of the prongs of leadership in the socio-economic development of this nation,” he noted.
Consensus
Dr Ankrah’s comments on the inability of banks to take a commanding role in the economy mirror similar sentiments expressed by business mogul and Chairman of the Great Argon Group, Mr Torgbor Mensah.
Mr Mensah said the GRAPHIC BUSINESS in a recent interview that banks in the country had remained at the periphery of banking where they preferred to finance imports to the detriment of entrepreneurship.
Source: Daily Graphic
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