Workers Say No To GCB Sale

A number of junior workers of Ghana Commercial Bank are planning to join forces with civil society organizations to put pressure on the government to back down from moves to divest the bank.

Though the workers are yet to come public, it is becoming clear that there is some disquiet among some of them who are likely to face the axe when a strategic investor gets hold of the majority shares in Ghana’s largest commercial bank.

The workers’ fear is based on the fact that in the run up to divestiture or privatization, employment numbers tend to drop, sometimes greatly. It is a battle of the winners versus the losers.

The Managing Director of the Bank, Matilda Obeng Ansong last Friday added her voice to the increasing public outcry against the planned divestiture of GCB, arguing that the bank can hold its own without a strategic investor.

Obeng Ansong explained that GCB’s excellent performance over the years is an indication that the local staff can manage the bank without input from foreign investors.

A couple of days ago, the Integrated Social Development Centre (ISODEC), an advocacy NGO said it was bracing up to block the divestiture of GCB shares to strategic investors who are part of a powerful international financial cartel bent on annexing all viable financial institutions in the developing world.

The government is under pressure from the IMF and other bilateral donors to sell 46.8 percent of its shareholding to a strategic investor. The other shareholders of GCB are the Social Security and National Insurance Trust (17.51) percent and 35.68 percent for private individuals and firms. The current structure of stockholding makes the government the largest shareholder, a holding bilateral donors frown on.

Reactions from the public on the divestiture have been swift, with many Ghanaians arguing that government does not really need to dispose of its shares in GCB. The divestiture of GCB to private investors is part of multilateral and bilateral donor conditionality for continuous budgetary support for the government.

Two weeks ago, the Divestiture Implementation Committee (DIC) through advertisements in the newspapers invited prospective investors to submit bids to acquire the government’s 46.8 percent shares in GCB.

At issue are the effects divestiture of GCB will have on rural banking, due to the fact that the other commercial banks have virtually folded up their operations in the rural areas. The advertisement said because of the importance of GCB in the payment system of country all bidders are requested to indicate how their proposals could accommodate the government’s objective of keeping all 133 branches of GCB countrywide open.

The maintenance of all GCB branches throughout the country remains a sticky point in divestiture of the bank. And all eyes are watching whether strategic investors will maintain the rural branches.

During the 50th Anniversary Lecture of the bank last Tuesday, the planned divestiture of GCB took centre stage. The former chairman of Board of Directors of GCB, John Sey kicked against government moves to divest its shares in the bank. In his view, many Ghanaians are not against the divestiture per se, but the mode of divestiture.

The former board chairman explained that off loading the shares on the stock market is not the solution either. He said the deal would amount to selling such a huge bank for a pittance and suggested that the bank should be properly valued before government decides on what to do with its shares. Sey observed that the divestiture, which is hanging on the neck of GCB like the Sword of Damocles would divert management’s attention from proper planning.

The main speaker at the lecture, Prof. Kwadwo Asenso Okyere, Vice Chancellor of the University of Ghana also wondered why government intends to divest its interest in a bank that is not receiving funding from the consolidated fund and shows no sign of financial distress.

''It is up to the government to decide what it wants to do with GCB'' the Vice Chancellor said.