...Stop the Financial Hemorrhage of the Nation
The reasons for establishing the Ghana Commercial Bank (GCB) had a lot of merit and had served Ghana very well. GCB was an excellent idea at the dawn of the re-birth of the new Ghanaian nation. GCB is here to stay to pursue its business objectives while it creates a wave of residual social benefits. Among them, the exposure of banking utilization to many communities, which today, Barclays and the Standard (Old Banks) are reluctant to offer their services. Even though the “Old Banks” claim to be good corporate citizens, the goals of the “Old Banks” are profits and not social engineering. Therefore, their planned strategies are guidance to their destiny.
Dr. Kwasi Botchwey of the P/NDC fame, the socialist of economic centralism order, became enlightened on the wisdom of “Free Market” economics so much so that he was the original signature of the document to the World Bank, which committed Ghana’s divestiture program. More importantly, the compiling reason why the decision to divest GCB from the government’s portfolio is valid in that nobody stays in a profit making business venture to loss money - except the Ghana Government. From a financial point of view, the equity to income ratio of the Government’s investment Cedis, for most of the time, had been in the red (negative). When the government finally divests, there will be more money for the private sector to access.
For the best use of Ghana Government Cedis, GCB is NOT the place in the new millennium. Here is a good financial reason:
For every 100 Cedis of taxable income made by the GCB, the government gets
After divestiture of GCB, for every 100 Cedis taxable income made by the GCB, Government revenue will be as follows (understanding that the National Reconstruction Levy carries lesser tax rate):
However,
Makola Market Logic: Since the GCB holds 50% of her assets in the government issues, then the Government is self generating half of her 7.3% of the dividend income from her investment holdings in the GCB. This is a very good example of “dead-capital”.
The longer the government vacillates on the decision date to divest from GCB, the more damage is inflected on the economy and the welfare of Ghanaians. This vacillation of emotional public debates has no sound business or financial underpins. If they do, then the debaters’ concern would be shifted to what is happening to the Ashanti Goldfields Corporation (AGC) takeover battle. AGC is more important to Ghana and is a greater source of generation of capital for Ghana, instead of GCB, which is utility that facilitates the multiple generation of capital.
The private sector, especially the GCB, will do well without micro management by government. While we are at it, please let us stop using the team strategic investor. Because any sensible investors will have a business plan that has set strategies to accomplish their goals. The Ghana Stock Exchange, the market place of business, will ultimately determine who will be shareholders of the GCB, of course, those with money - SIKA.
...Stop the Financial Hemorrhage of the Nation
The reasons for establishing the Ghana Commercial Bank (GCB) had a lot of merit and had served Ghana very well. GCB was an excellent idea at the dawn of the re-birth of the new Ghanaian nation. GCB is here to stay to pursue its business objectives while it creates a wave of residual social benefits. Among them, the exposure of banking utilization to many communities, which today, Barclays and the Standard (Old Banks) are reluctant to offer their services. Even though the “Old Banks” claim to be good corporate citizens, the goals of the “Old Banks” are profits and not social engineering. Therefore, their planned strategies are guidance to their destiny.
Dr. Kwasi Botchwey of the P/NDC fame, the socialist of economic centralism order, became enlightened on the wisdom of “Free Market” economics so much so that he was the original signature of the document to the World Bank, which committed Ghana’s divestiture program. More importantly, the compiling reason why the decision to divest GCB from the government’s portfolio is valid in that nobody stays in a profit making business venture to loss money - except the Ghana Government. From a financial point of view, the equity to income ratio of the Government’s investment Cedis, for most of the time, had been in the red (negative). When the government finally divests, there will be more money for the private sector to access.
For the best use of Ghana Government Cedis, GCB is NOT the place in the new millennium. Here is a good financial reason:
For every 100 Cedis of taxable income made by the GCB, the government gets
After divestiture of GCB, for every 100 Cedis taxable income made by the GCB, Government revenue will be as follows (understanding that the National Reconstruction Levy carries lesser tax rate):
However,
Makola Market Logic: Since the GCB holds 50% of her assets in the government issues, then the Government is self generating half of her 7.3% of the dividend income from her investment holdings in the GCB. This is a very good example of “dead-capital”.
The longer the government vacillates on the decision date to divest from GCB, the more damage is inflected on the economy and the welfare of Ghanaians. This vacillation of emotional public debates has no sound business or financial underpins. If they do, then the debaters’ concern would be shifted to what is happening to the Ashanti Goldfields Corporation (AGC) takeover battle. AGC is more important to Ghana and is a greater source of generation of capital for Ghana, instead of GCB, which is utility that facilitates the multiple generation of capital.
The private sector, especially the GCB, will do well without micro management by government. While we are at it, please let us stop using the team strategic investor. Because any sensible investors will have a business plan that has set strategies to accomplish their goals. The Ghana Stock Exchange, the market place of business, will ultimately determine who will be shareholders of the GCB, of course, those with money - SIKA.
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