BoG boss: Ghana lacks banks with financial muscle

The Governor of the Bank of Ghana, Dr Henry Kofi Wampah, has said Ghana needs to grow local banks that can shoulder massive investments needed in the oil, gas and infrastructure sectors of the country’s economy.

“With the advent of oil and gas, the demand in the energy sector, and the lack of infrastructure in the economy, we need banks with scale and the necessary international connections to leverage on international capital to provide the needed funding for these activities”, Dr Wampah said Thursday.

He said: “While small banks are necessary to deal with the SME’s sector, and a number of such banks…exists, although there are still deficits with respect to funding that sector, there are no big banks that can shoulder the demands for lumpy oil and infrastructure financing on their own without some regulatory intervention”.

“This does not bode well for the kind of rapid growth and economic transformation expected of a lower middle income economy such as ours”, Wampah said at the launch of the Group Nduom (GN) Bank – the latest universal bank in the country.

GN Bank – formerly First National Savings and Loans – owned by former presidential aspirant of the CPP and PPP, Dr Papa Kwesi Nduom, recently got its licence and certificate from the Central Bank, to operate as a universal bank.

Using the rebranding event to urged local banks to venture into the international market, Dr Wampah told the gathering that: “While we concede the operating environment has been challenging in recent times, this should not stop us from thinking globally and acting locally”, adding: “In the wake of the financial tsunamis and hurricanes, we must seek to grow our banks so that they will be responsive to our needs and be able to withstand the turbulence and vulnerabilities of the banking landscape”.

According to him, “the evolution of our banking industry in response to the needs of the economy has to be taken seriously”.

“We need to engage in serious discussions on these matters and we need to rise above parochial interests and look at ways of deepening our banking system that enables it to support the next stage of our economic growth”, he suggested.

The Governor pledged the support of the Central Bank in achieving that. “The central bank is prepared to engage and guide honest and frank discussions of these matters and provide the necessary leadership in the transformation of the sector in the coming years”.