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06.10.2005 Business & Finance

VEEP launches 40th anniversary celebrations of ADB

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Accra, Sept.6, GNA - Vice President Alhaji Aliu Mahama on Thursday cautioned the banks to shake off the culture of dependence on Government financial instruments, which provided supernormal profits at little risk. They should rather provide credit and financial extension services to the largely informal sector.

Launching the 40th anniversary celebrations of the Agricultural Development Bank (ADB) in Accra, Alhaji Mahama said: "In the face of falling prime rates, commercial lending rates remain high and short term, increasing the cost of business and constraining investment. "Even more worrying is the conservative risk management systems, which are so slow that credits tend to be approved when the commercial need is over." The celebrations, which would span October 6 to December 18, is on the theme: "40 Years Of Driving Ghana's Agriculture Through Banking", and would comprise public lectures, symposium, community service and the inauguration of ADB House in Accra.

ADB started as a Rural Credit Department under the Bank Of Ghana in 1964 to provide for the credit needs of small- scale farmers, study the problems of agricultural credit and prepare the necessary legislation, plans and procedures for the establishment of an agricultural credit bank.

Alhaji Mahama challenged the banks to develop new products, which were responsive to the needs of the country's predominantly agricultural and informal economy. He stressed: "Agricultural financing must not be seen as an enclave activity and, therefore, left to specialists banks like ADB alone." Alhaji Mahama said the large agro-rural economic structure and the introduction of universal banking called for the need for the banks to have an obligation to move from relatively safe investments in Government bonds, formal sector employee loans and blue chip companies. They must rather concentrate on more support for medium and small-scale activities in farming, post-harvest warehousing, processing, packaging, distribution and marketing.

Alhaji Mahama said artisans and fledgling Ghanaian companies needed support services to ensure compliance of banking regulations and to imbibe the discipline needed to apply loans and other forms of support effectively. He said champions of Ghanaians industry should be supported with additional resources on preferential terms to expand even further. Professor George Gyan Baffour, Deputy Minister of Finance and Economic Planning, lauded the efforts of ADB in helping the Government to implement its fiscal policies.

Mr Edward Boakye-Agyeman, Acting Managing Director of ADB, said the success story of the Bank included the introduction of several agricultural financial schemes for primary production of food, commercial crops, fishing and agro-processing among other things. The Bank had also partnered Government to promote food security, reduce poverty and promote value addition to agricultural produce. Mr Paul Koranteng, Chairman of the Bank's Board, said re-capitalisation of the financial institution in 1988 turned its fortunes round and moved it from one its most difficult period. He said ADB was supporting more than 30,000 cotton farmers in the Northern Region this year and said the number would be doubled next year while the frontiers would be shifted to include mango cultivation.

Mr Albert Essien, Managing Director of ECO Bank Ghana Limited and President Of Ghana Association of Bankers, described ADB as a well behaved bank that had pioneered a number of banking innovation including the Western Union Money Transfer. Mr Ernest Debrah, Minister of Food and Agriculture and Chairman for the function, pledged the support of the Sector Ministry to ensure the successful implementation of the Youth in Agriculture Project.