Why ADB must not go

Why ADB must not go
By Kofi Akordor
The long and sometimes acrimonious debate on the energy crisis has abated, thanks to the improvement in the power supply system. However, for a nation which is enjoying its freedom of expression there is something to discuss always. This time, attention has shifted to two issues. One, the sale of Bank of Ghana shares in the Agricultural Development Bank (ADB) and two, the alleged payment of bribes to some government officials by an international cement manufacturing company so as to maintain its monopoly on the local market.
My interest for now will be in the former. That is the sale of Bank of Ghana shares in the ADB to Stanbic Bank owned by Standard Bank of South Africa and which is owned by Standard Chartered Bank of Britain. As could be seen, Stanbic and Stanchart (Ghana) share common parentage but for operational reasons and to avoid any ambiguities, Stanbic had to adopt a new name, hence what it is called.
What it also means is that should the government remains adamant and goes ahead to sell ADB, this local bank will be swallowed by and become a member of the Standard Chartered Bank of Britain, which is a giant conglomerate in the world of finance. In a purely business setting, this is welcome news since there is nothing wrong with being associated with a giant company with a lot of resources to spare.
We may even argue further that the acquisition will benefit ADB in the form of large doses of foreign cash that will flow into its coffers by virtue of its international links to enhance its operations. In fact, this argument constitutes the strength of the proponents of the acquisition and that is all.
The ADB, however, is not just about banking. The ADB story goes beyond that. It is about a nation’s security. It is about a nation’s independence. It is about social responsibility and it is about survival. The ADB has been tasked to fuel the agricultural sector which, even in its current primitive state continues to be the backbone of the national economy.
Agriculture is an area where you can hardly make predictions until you see the fruits ripe. Even here, post-harvest losses through improper handling and other calamities such as floods and bushfires can easily turn a smile into a cry. That is why very few banks will stick out their neck to grant loans for agricultural ventures. Our situation has been rendered even more unpredictable because of our reliance on the rains and crude methods for farming.
Even though it can be argued that there is risk in every business, that of agriculture is more overwhelming and, therefore, a gamble many financial institutions whose prime motive is profit making will not take. That leaves farmers without any anchor. This is the void the ADB has been designed purposely to fill. This is a bank which understands the local farmers and is ready to gamble along with them.
Banks are not only sources of credit. Financial institutions can be powerful instruments of coercion that could be employed under certain circumstances to influence political decisions and policies. Those who may not know this, may want to find out why the International Monetary Fund (IMF) and the World Bank (WB) have never been the darlings of poor Third World countries. This is because what is deemed as financial support from these institutions come with strict and what could be described as atrocious conditionalities to the extent that recipient countries become pawns in the hands of the economic powers and where aid becomes an instrument of enslavement.
Just imagine that recipient countries are not given the free hand to disburse moneys the way they should to satisfy their national interests. The loan comes with instructions. Who and who should be employed; the amount that should be paid as salaries and allowances to expatriate staff; where logistics such as equipment and vehicles should be imported from, etc etc. At the end of the day, the loan trickles back to the donors while the recipient country is saddled with huge interests and debt-servicing to contend with.
Those who claim ignorant of these intrigues in the financial market should remember that cash flows that will swell the coffers of the new ADB will not be freely available for local industry if there are competitive products outside mainly from the countries of the major shareholders
Let us take South Africa, which is a major player on the continent where business and finance are concerned. If there is say, the need to establish a tomato cannery in the country and assistance is required from Stanbic, where is the guarantee that this loan application will receive favourable response if at the end of the day, this local tomato factory is going to take business from or compete with tomato factories in South Africa or other places where the principal shareholders have business interests?
This is just one example. That is why strategically, it is unwise in the name of trade liberalization and globalization to allow certain state institutions to fall into the hands of foreign interests. This has nothing to do with closing our doors to foreign investors. You do not expand by transferring national assets to foreigners. You expand by allowing foreign investors to enter the local market and create competition.
Already, a number of foreign banks mostly from neighbouring Nigeria have entered the local market and are doing well. Nothing stops Stanbic from expanding by opening more branches country-wide. Stanbic or for that matter any other bank can create a special department purposely for agricultural development or establish a completely new bank for that purpose.
It is better and more advantageous for the country if there are more than one bank devoted to agriculture than to have the only one swallowed by a bigger one with a different agenda all together.
State enterprises have every chance of succeeding if they will be freed from all forms of political interference. Ghana Airways is gone and what replaced it has not proved to be better. As long as principal officers of state enterprises have to look behind their shoulders to see who are watching they will continue to take decisions that serve the interest not of the organizations they are running but that of those in political power. In that case, it is not the Ghanaian manager who is not good, but the politician who is selfish.
The ADB must not go the way others have gone. It should be strengthened and allowed more Ghanaian participation to offer stiff competition to others. At least we will be assured that if others fail us, our farmers and fishermen will have the shoulders of ADB to lean on.