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"
From: http://www.independentngonline.com/news/47/ARTICLE/20680/2007-02-09.html

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!

Darkness Falls in Accra (3): PURC Talks: How Ghana Govt is Compounding Consumer's Problems; Ghana Chocolate Day!

Earlier this morning, I called home – only to be told that the electricity had gone off around 9am. It was then 11am. I decided to call the Public Utilities Regulatory Commission (PURC), and spoke to Grace [name changed to protect the innocent] of June 2006 fame, when I first blogged about it here.

I wondered why the electricity was so sporadic, and was informed that they were working on changing the transformers that feed electricity into Spintex road parts and beyond. Puzzled, I quizzed her as to why despite the initial announcement on the radio, ECG could not simply announce on the radio (and elsewhere) that there would be intermittent outages so that citizens could prepare themselves.

She promised to speak with the district engineer of ECG in that area. One thing lead to another and I got to questioning her on why despite the every-five-day-outage of 12 hours, this outage was happening in the first place. She explained that government owes the electricity company some ç300bn!

I have seen news of this in the dailies, but have, regrettably, not been able to get it on-line. Either way, I queried further, and she revealed that the so-called MDAs (ministries, departments and agencies) had run their bills to that tune. Instead of the Ministry of Finance (which receives the bill) issuing the payment, it is stuck there!

In any event, she was displeased with the fact that the tariffs, which had been proposed had been dismissed by the government, ostensibly in order to continue absorbing it. I remember that upon reading this last year ( http://216.239.59.104/search?q=cache:xSqEw_Lo37YJ:www.ghananewstoday.com/gnt_NewsContribute.cfm%3Findexnumber%3D2437+%22purc%22:ghananewstoday.com&hl=en&ct=clnk&cd=3, I was a bit mad that the Chairman of the PURC, Pianim, would want to have an adjustment. I would still disagree that an adjustment to attract investors is woefully wrong approach to energy policy. Rather, an adjustment to ensure that those who can afford it pay for electricity is better.

That said, a comprehensive thinking-through is needed, and dare-I-say-it, a referendum on an issue as important as this. A referendum, though, is something that seems anathema, or alien, to government policy, so I don’t foresee any of it happening here soon. However, our journalists could be discussing this in greater depth, and leaving the unnecessary discussion of politics to those who should be politicking—the politicians!

I suspect Grace was telling the truth, if this report on Myzongo.com news is anything to go by:

The Tema Regional Directorate of the Electricity Company of Ghana is replacing its obsolete equipment at the cost of 15 million US dollars to curb the intermittent power outage experienced in the City.

Addressing a Press Conference in Tema, the Regional Director, Dr Nicholas Smart-Yeboah said the amount is generated from the company’s own internally generated funds.

He said it is expected that work on the rehabilitation of the equipment would be completed in August this year to enable customers enjoy uninterrupted power supply.

I finally asked about the so-called Charter whose aim is to protect consumers and compensate them for lost energy (and water). Grace suggested that that would probably be ready by the middle of the year. Fingers crossed!

Oh yeah, as it's Val's day today, let me wish you a happy Chocolate day, too, as it is -- for the first time ever -- Ghana "Chocolate Day". A great article you can read here on fair trade chocolate.

Finally, it just struck my little brain that there are a number of pre-paid electricity meters in estates all over the country. Now, in order to avoid MDAs taking advantage and wasting precious ECG service, might it not be a good idea to remove them from metred electricity onto pre-paid ones, where they would pay upfront?

Remembering Ghana's Regulators...in this Jubilee Year

With Ghana sitting on the cusp of historic change as it sets the stage for the ushering in of its Jubilee year, it is my earnest and sincere belief that the necessity to initiate a review of Ghana's regulatory agencies is critical. I had, in fact, been thinking of this last year, and went to the extent of listing some of them, which I'll post here shortly. In a somewhat serendipitous move in the direction of writing more about the country's regulators and their work--or lack thereof--I came across an article in today's Business and Financial Times about the National Petroleum Authority closing down 8 petroleum outlets that were unlicensed.

"This is where we should be going", I thought. As you know, thoughts like these flash many people's thoughts many times a year, but translating it into a desire of exposing regulation--or non-performance of it--is not always at the fore.

In 2007, and in my thirtieth year of existence, I'm about to try and reverse the trend of merely cogitating and arm-chair-strategising. I'm taking this renewed attitude into different manfestations of action that will feature on many of my other blogs. Within the next few days, you will find an outline of some of the new features that I will be incorporating into this blog, making it -- in the best way I can-- a blog to stop by--by hook or by crook. ;-) [You've gotta give it to me for humility, no?:-))))]


an inset taken from my mobile phone of the article...