Economist, Professor Godfred Bokpin is confident the support from the Ghana Amalgamated Trust(GAT) for some five (5) undercapitalized banks in the country will boost local content in the banking sector.
Government is expected to issue a 403 million dollar bond this month to support solvent and well governed indigenous banks under the Ghana Amalgamated Trust.
While some stakeholders have spoken against the support for the beneficiaries of the fund, Agricultural Development Bank (ADB), National Investment Bank (NIB), OmniBank and Sahel Sahara, Universal Merchant Bank (UMB) and Prudential Bank, Professor Bokpin in an interview with Citi Business News, said it is important that such banks are not allowed to collapse.
“Largely I am in support of this arrangement. The reason being that we are losing local content in the banking industry and that is not good for us. There is the urgent need to actually preserve local content in the banking industry” he said.
He observed that the move will also give local banks an opportunity to invest in critical areas of the economy.
“It doesn’t help the economy, ultimately in terms of redistribution of wealth and the desire to narrow income inequality if your banking sector is excessively dominated by foreign players”, he stressed.
Professor Bokpin added that the state of the banking sector should ultimately benefit the Ghanaian economy.
“One thing we should remember is that these foreign players may not have the interest of this country as their ultimate goal. One day they can get up and sell off their interest to another entity we may not be comfortable with. It is these local banks that largely have been dealing with local SME’s thereby supporting local businesses, the big multinationals are more interested in undertaking big ticket transactions.”
By: Bobbie Osei/citibusinessnews.com/Ghana