With Ghanaian shareholding in the banking industry on the decline, fears are being expressed that the future of investments in local agriculture in the country will hit a new low, the local Agribusiness Chamber has said.
In an interview with Goldstreet Business, the Chief Executive Officer (COO) of the Chamber, Anthony Morrison indicated that, “We need to invest in agriculture as a country. But in order for us to invest in the sector and sustain it, we need to take control of our local banking industry.”
According to report by GN Research, foreign investment in Ghanaian banks keep increasing as local private interest see a downturn.
According to the research originally done by the African Report, the local ownership of Banks in Ghana averaged 61 percent between 1992 and 2006 but by 2017, the figure has fallen to 21 percent.
Morrison opined that, moving forward, in order to strengthen agriculture investment and financing, government needs to pay keen attention to the ownership of the banking system as a very strategic area in the economy of the country.
“If we want to actually sustain the sector in terms of agriculture financing and investment, food security, sufficiency and safety; it is time you look at where the funding is coming from,” he said.
Though the deregulation of the financial sector resulted in increase in the number of foreign banks, it can also be seen that generally, the increase in the minimum capital requirement for banks has guaranteed the survival of the foreign banks than local ones.
As it stands now, most banks enjoy putting their monies into direct trade businesses, which are into buying and selling. And it is believed that the foreign interest in those banks favour trade with their countries of origin and are more willing to advance credit to those who buy from their country.
“This is because, the intelligence that goes into financing is that; if I am an owner of a bank, I decide the sector of the economy that should be given more credence, over the others,” he explained.
“This is why we decide that as true Ghanaians and as owners of the economy, 30 percent of our investment should go into agriculture financing,” he added.
With the government’s plans to establish a National Development Bank, Morrison asked; “so if you want to put in place an investment bank, what is the percentage of the bank’s credit that is being channelled into agriculture and agro-processing.”
He indicated, saying; “It must be defined otherwise; the same problem we have with the already existing banks would emerge with the new bank too.”
By Joshua W. Amlanu