Nigerian Banks find doing business in Ghana good to resist
Loading ...Ghana continues to be an ideal investment destination to Nigerian investors. Even though over the years businessmen from Nigeria have invested heavily in the media and aviation industries in Ghana, their involvement in the banking industry in recent years has become the most pronounced.
All the Nigerian banks doing business in Ghana today are leading brand names in Nigeria; mostly, in the top 10 bracket.
The massive size of the Nigerian domestic banking opportunities, and the fact that the Ghanaian population is about a fifth of that of Nigeria, market size alone could not have influenced the decision by these banks to invest in Ghana; good economic policies and prudential banking supervision may all have played a part.
Ghana has been undergoing the process of financial sector restructuring and transformation as an integral part of a comprehensive programme to ensure that the country achieves emerging market status.
And, as part of the process of liberalisation, the Bank of Ghana introduced the “universal banking” licence in the first quarter of 2003. The concept of universal license is to allow banks to undertake commercial development, investment or merchant banking without the need for separate licences.
The reforms seem to have paid off handsomely ,as the country has become one of the most vibrant financial services centre in Africa.
It is no surprise, therefore, that the economic managers feel very confident that an offshore financial services centre in Ghana could be as vibrant and credible as any other in the world.
Significantly, the reforms, for example, moved the financial sector from a regime characterised by controls to a market-based regime.
This process, therefore, liberalised controls and interest rates and bank credit. Gradually, the central bank shifted from a direct system of monetary controls to an indirect system that utilized market-based policy instruments.
The recent developments in Ghana’s banking environment with the liberalisation of entry encouraged foreign banks and investors, noticeably those from Nigeria to consider the country as a good destination for their investment.
What must also be pointed out is that the Nigerian banking industry has itself undergone tremendous recapitalisation reforms over the past five years.
The reforms are aimed at strengthening the asset base of the banks to ensure that those without the required financial strength are not allowed to operate in the country.
The recapitalisation process would obviously have led to excess liquid funds for the banks, which have invested heavily in the Ghanaian economy.
Currently, leading banks in Nigeria, including Zenith, Intercontinental, UBA, and GTB have all established subsidiaries in Ghana.
There is the growing speculation that many more Nigerian banks are considering Ghana as their next destination in their strategic expansion programmes.
Liberalising entry and encouraging foreign banks and investors into the financial services industry has increased competition in the banking industry as well as the introduction of strong business practices, technology, products and risk management systems have contributed to capacity building in Ghana.
This has opened up the Ghanaian financial system and the ensuing competition has been good for the industry and has given impetus to dynamic efficiency in the industry.
Many of the traditional local banks in Ghana have responded to the innovative products and competition brought by the foreign banks by adopting a strategic rethink, and reshaped their focus and direction in order to be attractive to customers.
Standard Trust Bank (STB) now United Bank of Africa (UBA) was the first Nigerian bank to pitch tent in Ghana. The bank started operations in Ghana in January 2005.
The introduction of the universal banking license by the Bank of Ghana has helped the new banks in the country, since they are able to offer a wider range of products to customers.
Surprisingly, most of the new banks that have entered the industry have not done things differently as retail banking products continue to dominate the innovative products and services offered.
Nevertheless, it is still worthy to note that there have obviously been big changes in the banking industry with the entry of the foreign banks.
UBA, for example, as part of its product innovation strategies launched the “Standard Cashless Account,” with the aim of attracting those potential customers who could not have access to banking services in the country, due to prohibitive initial deposit requirements, to be able to open their first bank account.
This initiative seems to have alerted the other banks, who responded by offering no deposit account opening facilities or reduced the minimum deposit required to open an account, also to attract customers.
With the large proportion of the population outside the formal banking sectors, and often classified as ‘unbanked’, the innovation has been a good omen for many.
Many Ghanaians are unaware of the benefits of the financial products in existence and are, therefore, unable to access the needed credit lines even when they have the means to do so.
In September 2005, Zenith Bank also entered the Ghanaian market, introducing into the country the Information Communication Technology (ICT) platform that has made Zenith a household name with customers in Nigeria.
To date, the bank has one of the best ICT infrastructures in the country. The bank is also aggressive in its drive to win customers.
Guaranty Trust Bank, GTB, started operations in Ghana in the first quarter of 2007, with Intercontinental
Bank also forming a local alliance to become the latest Nigerian bank to enter the banking industry. It is widely believed that Oceanic Bank, another Nigerian bank has interest in Ghana.
Apart from the Nigerian banks, the largely Libyan-owned Banque Sahelo- Saharienne Pour L’investissement et Le Commerce Ghana (BSIC) also has also shown interest in the country, with Bank Baroda of India showing presence as well.
BSIC is another bank that could have a positive impact on the Ghanaian financial market. BSIC is a joint financial institution of the Community of Sahel-Saharan States and has an authorised capital of 250 million euros.
It presently operates in more than eight African countries, with most of them in the northern half of West Africa, as well as, Togo and Benin.
BSIC has in the past invested heavily in agriculture in their operative countries, and it is expected that the same strategy will be adopted in Ghana.
The most significant development in Ghana is that key players in the country’s financial services industry are upbeat about the outlook for the sector, with widespread optimism about future opportunities.
Over the past 16 years Ghana has witnessed increased political stability, increased levels of foreign direct investment, enhanced infrastructure and privatisation, improved regulation and governance, as well as anti-corruption legislation that have all contributed to good governance in the country.
The opening up of the banking industry to national, pan-regional and foreign banks could be a key contributor to the development of the country.
Already, the competition has focused the local banks’ minds on providing relevant products and strong local service.
Some local finance houses have taken advantage of the opportunities offered by the banking sector by taking a step forward to become banks.
Former discount house, Fidelity, has converted to Fidelity Bank, after satisfying the requirements by the Bank of Ghana to become a bank. Fidelity joined the banking fraternity with more than 4,000 customers from its discount house operations.
The initial customer size gives the bank a great start. The banking industry has a major role to play in moving the country forward. Access to credit is very fundamental in every economy that is serious about economic growth and development.
This is where the banks could consider micro lending as a very viable option, not only to increase their own portfolio (after all a bank has to lend in order to make money), but could also contribute to the overall development of the economy.
Feel Free To Sue Doctors - Ghana Medical And Dental Council
The Ghana Medical and Dental Council (GMDC) has urged the public to feel free to sue doctors for compensation for wrong diagnosis or other unprofessional conduct.
The Registrar of the council, Dr Eli Atikpui, told the Daily Graphic that although it was right for patients to report doctors to the GMDC, the council could not pay compensation for any harm done.
He said the best it could do was to withdraw the certificate of an offending doctor and cause the issue to be published.
He added that it was the responsibility of the aggrieved person to sue the doctor involved at the law courts for whatever compensation he or she desired if it could be proved that the wrong diagnosis or unprofessional conduct resulted in any harm.
Dr Atikpui also advised proprietors of private clinics and hospitals to request permanent registration and retention certificates from doctors before employing them.
Verification, he added, should be done on such certificates from the council.
Meanwhile, a fake medical practitioner, Richard Brown Afful, has been fined GH¢1,000 by a Circuit Court in Aflao.
He will go to jail for five years if he fails to pay the fine. Afful was charged with false assumption of professional title and practising medicine without the requisite training.
The court, presided over by Group Capt Martin Luther Obeng Ntim (retd), heard that Afful posed as a medical practitioner and secured employment with a hospital in Aflao.
Afful used the name Dr Richard D. Manneh and produced two certificates, one issued on July 27, 2001, qualifying him as a medical officer, and a second certificate, that of a surgeon, was dated July 20, 2004.
Afful’s professional proficiency came into doubt a few days on the job when he prescribed wrong medicines for ailments.
The management of the hospital sought clarification from the University of Ghana Medical School and it came out that the suspect’s registration number as a doctor belonged to a graduate of the medical school, Dr Richard Kwame Mannah, who passed away in September last year.
Dr Mannah was a houseman at the Korle-Bu Teaching Hospital. Afful was arrested and he admitted that a man who now lived in the United Kingdom forged the certificates for him but he could not remember his name.
Further investigations by the police revealed that Afful had attended many symposia within the country, the last one being “An overview of the HIV situation in Ghana” held on September 7, last year.
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