Don't privatise ADB - Speakers

Accra, July 19, GNA- Speakers at a roundtable discussion on the implications of privatising public enterprises with particular reference to the Agriculture Development Bank (ADB) on Thursday, have noted that it would not be in the interest of the nation to put the running of the bank into the hands of a private investor.

They contended that ADB was doing very well and carrying out its mandate of supporting the agricultural sector in a competitive way and with solid and liquid assets.

The speakers, mostly economists, politicians, members of the academia and civil society groupings emphasised that after the bank had surmounted its difficulties the appropriate thing to do was to re-equip it to operate at its optimal capacity.

Professor Wayo Seini, Senior Fellow, Institute of Economic Affairs (IEA), which organised the roundtable, said ADB should not be privatised because of its business portfolio.

"The agricultural portfolio has been growing consistently over the past two decades and its share in total loans and advances portfolio has averaged 600 billion cedis in the period 2001 to 2005", he stated. He noted that in spite of the daunting challenges including high provisions for bad and doubtful debt, ADB approved 525.40 billion cedis in 2006 representing 35 per cent of its total direct loans and advances. "Between 2005 and 2006 ADB increased its profit from 74.67 billion to 107.65 billion cedis, an increase of 44.17 per cent". Prof Seini noted that the implication of privatising a strategic asset like the ADB could compromise national security since its management would be in the hands of a private operator. "It may also threaten the confidentiality of private information since the ADB is the major outlet for public and development partner's support to the agricultural sector", he intimated. The IEA Senior Fellow revealed that the move could result in loss of jobs, particularly skilled managerial ones if the new owners were multinationals.

"This can lead to the movement of profit abroad rather than investing in the country especially when the new owners are foreign investors", he stated.

Prof. Seini suggested that if privatisation should be considered then public stock sales should be opened to Ghanaians both at home and abroad to ensure that the bank's security was maintained as well as local investment among other things.

"Open sales to foreign bidders can not be allowed neither encouraged to avoid multinationals taking over the bank", he stressed. The Government Spokesman on Economic and Finance Affairs, Mr Kweku Kwarteng, pointed out that the government had not taken any decision on the sale of ADB and said discussions were still going on. Mr Ernest Debrah, Minister for Food and Agriculture, commended ADB for the giant strides in its operations but stressed that in spite of its gains it was not wrong to privatise the Bank to make it more efficient.

He noted that as part of global business practice there was nothing wrong for a private bank to express interest in another bank saying transfers bids were done everywhere in the world. Mr Debrah said that the appropriate step that had to be taken to make the Bank efficient to support the sector and provide credit to farmers to ensure food security was what had to be critically examined. Mr Asiedu Nketiah, NDC General Secretary, wanted to know who wanted to privatise ADB whether, it's was a government initiative, the Bank of Ghana or Stanbic Bank.

He said the reasons for the privatisation had to be clearly spelt out to engender constructive discussion for the best way out. Other speakers held the view that the agricultural sector entailed enormous risk and expressed doubts if a private bank would curtail its core business and invest in a sector, which did not promise outright returns.

They called on the government to be circumspect in taking a decision on the only national asset that directly invested in agriculture to ensure food security for Ghanaians.