Friday, February 16, 2007

As the Week Draws to a Close in Accra: Thoughts on... Stanbic Bank’s Taking Over Ghana’s Indigenous Agricultural Development Bank (ADB)

Let me be clear: I have a problem with the increasing number of South African interests in Ghana. From the so-called Accra Mall--set to be ready by May 2007, to the very expensive Woolworths, and Stanbic Bank, these are all ventures spearheaded by South African interests. Big South African interests.

When I first started work in Accra in 2004, not once was I tempted to save, or bank with Stanbic as soon as I found out that it was a South African bank. I have nothing against the country, but everything against big power interests that seek to distort small economies, like that of my beloved country of Ghana.

So, you can imagine my rage to have heard on CITI Business news at 1pm yesterday afternoon that Stanbic bank was going to take over the very profitable and indigenous Agricultural Development Bank that was established in 1965. According to December 2000 statistics from the UN’s Food and Agriculture Organisation, the total assets were $190m. Six years later you can imagine what it might be, especially with its portfolio for agriculture being a formidable65%, even though an article maintains it has fallen to 50%.

Now, yesterday, after I almost suffered a heart attack upon hearing the news, I decide to check my facts on-line. I got a cache of a story from Business Week Ghana online entitled Stanbic Bank Bids for ADB, which indicated:

Stanbic Bank is in negotiation with the Government of Ghana and the Bank of Ghana to acquire the Agricultural Development Bank. Government and the central bank are ADB’s shareholders. The discussions are still centred around technical details concerning how ADB would be run, and no bid price has been offered as yet. As of the end of 2005, ADB had total assets of ¢3,431.73 billion and shareholders’ funds of ¢619.66 billion

Now, consider this: once Stanbic bank takes over ADB, it has no intention of focusing on agriculture, like it has been doing traditionally for the past 42 years. Note that Ghana is the world’s second top producer in cocoa, and so imagine the impact that this takeover will have on the country’s farmers!

Stanbic Bank, its Ghanaian subsidiary, does not want to be committed to a specific proportion of its lending for agriculture

The article ends that Stanbic bank is in rapid expansion mode, and I ask myself: to what end? Then I read statements like this:

South African investor confidence has been bolstered by Ghana's educated and skilled workforce, vast mineral and agricultural resources, the official use of English and a shared colonial legacy.
South Africa companies can also use their operations in Ghana as a springboard to other West African markets

Enough said.

Except, that I have been following ECOBANK’s Pan-African aspirations, as exemplified by the quote below:

Following the adoption in June 2006 of its new strategic vision, the Ecobank Group is, now determined to transform itself from a regional banking group to a pan African group. "In spite of its international dimension, including the opening up of its capital to international shareholders, Ecobank remains focused on Africa," said MandÈ SidibÈ, President of the group. "Ecobank will continue to be true to its mission of supporting Africa’s economic and financial development"

Now you no longer have to scratch your head in wonderment at the possible fears being espoused by South Africa on the West african “leadership”, that seems to be led by the very efficient ECOBANK.

All these points underscore real fears about the loss of jobs when the takeover happens. I called CITI FM this afternoon, and spoke to the business desk. One guy there informed me that he knows very well a high official from Stanbic Ghana, who is equally furious at the developments. He confirmed to me that the news is reliable and credible that the takeover will happen most likely by the middle of the year.

It behooves anyone with any iota of information to spread the news on this most scandalous South African takeover of a profitable Ghanaian bank!
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