A former Chief Executive Officer (CEO) of the Bulk Oil Storage and Transportation Company Limited (BOST) has said the next National Democratic Congress (NDC)government will pay attention to building institutions that finance Ghanaian businesses.
Kwame Awuah-Darko stated that this was a means to support businesses in the Small and Medium Enterprise (SMEs) space that have been affected by the banking sector crises.
The former CEO explained in an interview explained that the businesses play an important role in the economy hence the necessity of the move.
“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. You can see that in the drop in volume of the business activities at the ports which started way back in 2018, it is not a function of Covid-19”.
“The small Ghanaian middle class we had played with the indigenous Ghanaian banking sector, because the multi-national 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,” he said.
He mentioned that the NDC had realised that Micro Finance Institutions (MFIs), Savings and Loans (SLs), indigenous banks have been pushed out of the system following the banking sector crises.
A development that has left the average Ghanaian struggling to access capital.
Regional Development banks
Kwame Awuah-Darko stated that the need for regulation for Regional Development banks.
He said the New Patriotic Party in their manifesto are pursing the normal universal banking approach which regulation style must be change if there is a desire for a development financial institution.
“If you want to focus on how to build this country, you have to focus on how to build regional development financial institutions.
‘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,” he said.
He emphasized the need to develop the economy in order to develop the country itself.
The Bank of Ghana revoked the licenses of 347 Microfinance Companies and that of 23 Savings and Loans and Finance House Companies in 2019, citing insolvency, mismanagement and fraud in some cases.
The exercise was part of the financial sector clean up by the central bank which also saw some eight banks losing their licenses between 2017 and 2019.
Government justified the cleansing exercise, arguing the banks would have, otherwise, collapsed, and with them, the deposits of more than a million clients.