Banking industry should support oil and gas sector-Fiifi Kwetey

Tema, Dec 12,GNA-Mr. Fiifi Kwetey, a Deputy Minister of Finance and Economic Planning, on Friday called on the country's financial institutions prepare in earnest to support the emerging oil and gas sector. He said government was working to ensure the oil find would serve as a catalyst for the accelerated growth of the manufacturing and other sectors of the economy.

Mr Kwetey who was commissioning the Tema Main Office of Ecobank housed in a multi-purpose building in the harbour city, said banks would be need strong capital base to survive in their new role. "It is in this regard that we believe that the Central Bank's iup scaling of the capital base of banks is very timely, as this will put the industry on a strong pedestal to catapult the development of the Oil and Gas Industry."

The Deputy Finance Minister said apart from a strong capital base to support the sector, the banking industry would also need a low interest rate in order to provide meaningful financial packages to the sector. He pointed out that with the capital intensive nature of the oil and gas sector, a high interest rate regime would be a dis-incentive to private sector players in the Oil and Gas sector who would want to access credit from the banking sector.

Mr. Kwetey charged banks to complement government's effort at fiscal consolidation to ensure stable and low interest rate regime, by reducing their lending rates. He further charged financial institutions to build capacity in the area of Oil and Gas financing.

"As an emerging industry, banks will need to ensure that they fully understand the Oil and Gas business to appreciate the industry dynamics and risks to effectively finance the sector." He commended Ecobank for its giant strides in the banking industry, and said by virtue of its affiliation to other Ecobank Affiliates operating in Oil producing countries, the bank would be expected to tap into the experience of Nigeria and other oil-producing countries to build capacity in oil and gas financing for the Ghanaian sector.

The Deputy Finance Minister assured banks of government's continued commitment to ensure macro-economic stability through a coherent and disciplined fiscal and monetary framework in which fiscal and monetary policies worked in a mutually supporting way. Mr. Millison Narh, Deputy Governor of the Bank of Ghana, said it would continue to ensure that the financial sector worked within a strong regulatory and supervisory framework.

Mr. Narh intimated that the state-of-the-art Collateral Registry established by the Bank of Ghana under the Borrowers and Lenders Act 2008 (Act 773), where charged and collaterals created by borrowers could be registered, would soon be operational.

The Bank, he further disclosed, was collaborating with the Ministry of Finance to, under the Anti-Money Laundering Act, establish the Financial Intelligence Centre to help prevent abuse of Ghana's financial system by money launderers, in order to preserve the country's strong reputation. Mr. Samuel Adjei, Managing Director of Ecobank, pledged that the bank would continue to be pro-active in the banking industry by coming out with innovative financial products and services to meet the growing needs of individuals and businesses.

Mr. Adjei recounted that over the last five years, Ecobank had expanded its branch network in the country from seven in 2004 to the current number of 51.

Mr. Samuel Hiram Yaro, Tema Main Branch Manager of Ecobank, said with the commissioning, the branch would be operating services like the Ecobank Rapid Transfer, whereby through electronics, customers could access funds or remit funds in any of its branches firmed in 29 countries on the African Continent. According to him, it would also operate the Junior Savings Account in which parents would be encouraged to open accounts for their children, in addition to inculcating wealth creation and savings in the children. 12 Dec 09