Banks should support oil sector growth to reduce unemployment - Banking expert

Mr Osei Gyasi, the Head of Banking Supervision of the Bank of Ghana, has urged banks to meaningfully support growth of the oil sector to create jobs and reduce unemployment in the country.

“If the banks have long term adequate capital, as they have now, they will be able to support the oil sector and job opportunities will be created,” Mr Gyasi said.

Mr Gyasi said because the Ghanaian companies did not have the needed capital to go into the oil business, this has resulted in increased foreign content in the sector.

“What we have observed is that the local content as far as the oil sector is concerned is that some of the Ghanaian companies do not have the financial resources to go into those areas and that also impact on repatriation of profit.

”Also, if the banks are able to effectively support the oil sector, and reduce the foreign content in that sector, the sector would be able to employ more people and reduce the rate of unemployment,” he said.

Mr Gyasi said this on Tuesday in Accra at a roundtable with some members of the banking industry organized by Integrity Magazine under the theme:

“Ensuring Macroeconomic Stability through Effective and Trusted Banking”.

The programme was to open avenue for discussions and

understanding of the banking reforms and how it would translate into a stronger macro economy.

Mr. Charles Ofori-Acquah, Chief Executive Officer of Chartered Institute of Bankers, Ghana, said high non-performing loans, poorcorporate governance structures, capital inadequacies, non-compliance by banks and illiquidity were some of the factors that were affecting

the banking sector.

He said a strong banking sector was the backbone for stable economy in any country, adding that the banks needed macroeconomic stability to grow.

“Macroeconomic stability is therefore precondition for banking industry to flourish. Some of the key economic indicators of macroeconomic stability include low and stable inflation rate, low long-term interest rate, low fiscal deficit and currency stability.

These economic variables impact on banks in many ways,” he said.

Mr Ofori-Acquah, however, said there had been improvement in the banking industry, creating a platform for banks to positively impact on the economy, adding that “banks are now in better position to contribute to economic growth.”

Rev Kennedy Okosun, Editor-In-Chief of Integrity Magazine, said the programme was organized as part of their Corporate Social Responsibility to offer opportunity for Banks to come together and ensure that they were effective and trusted.

He said Integrity Magazine targeted decision and policy makers in government and the private sector to improve their corporate governance and profitability, and readers with strategic interest in Ghana