Ladies and Gentlemen, fellow Ghanaians, we have been compelled once again to speak out on a very critical national issue - that of the sale of a substantial portion of Ghana’s Agricultural Development Bank (ADB) to Stanbic Bank of South Africa.

The Agricultural Development Bank - ADB - was set up by the CPP with an Act of Parliament (Act 286) in 1965 to promote and modernize the agricultural sector through appropriate but profitable financial intermediation. The remit of the Agricultural Credit and Co-operative Bank as it was then called was broadened in 1970 with the following functions:

• The provision of credit facilities for the development and/or modernization of agricultural and allied industries.

• The identification and promotion of agricultural enterprises in Ghana, whether with persons or industries, both local and foreign

• The initiation of, or participation in, the conduct of research and training designed to promote agricultural development in general.

• The mobilization of financial and human resources to meet the country’s development needs in agriculture.

• Investment in the processing of agricultural produce.

• Operation of current, Savings and fixed deposit account.

• Financing of cottage industries.

The setting up of a development bank is very much in line with international thinking now as governments of many countries attempt to accelerate economic development by directing and steering finance to achieve this objective in a particular field . Accordingly development banks are deemed as a critical ingredient to improving access to credit, allowing for the provisioning of long-term finance at a low price, and the financing of start-up activities. In addition, development banks are seen as essential to the financing of employment creating activities such as the development of the agricultural sector.

The CPP was certainly aware of these considerations back in 1965 and 42 years on it is still the thinking behind the International Fund for Agricultural Development (IFAD), a specialized agency of the United Nations, established as an international financial institution in 1977 as one of the major outcomes of the 1974 World Food Conference. The Conference was organized in response to the food crises of the early 1970s that primarily affected African countries. The conference had resolved that "an International Fund for Agricultural Development should be established immediately to finance agricultural development projects primarily for food production in the developing countries". One of the most important insights emerging from the conference was that the causes of food insecurity and famine were not so much failures in food production, but structural problems relating to poverty and to the fact that the majority of the developing world’s poor populations were concentrated in rural areas.

It is the same reasoning behind the British government’s International Fund for Agricultural Development. Many countries across the world follow the same thinking and thus there is

• The Agricultural Development Bank of Nepal, established in 1968, and largely owned by the Government of Nepal.

• Agricultural Development Bank of China, a state-owned agricultural policy bank under the direct administration of the State Council.

• The Agricultural Development Bank of Trinidad and Tobago, established in 1968 and owned by the state.

• Agricultural Development Bank of Pakistan, - premier financial institution geared towards the development of the agricultural sector through the provision of financial services and technical know-how, and owned by the State.

• The National Bank for Agriculture and Rural Development, set up by the Government of India as a development bank with the mandate of facilitating credit flow for promotion and development of agriculture and integrated rural development. .

• Land and Agricultural Development Bank of South Africa, owned by the State.

• Agricultural Development Bank of Dominica, owned by the State.

• Agricultural Development Bank of Afghanistan, owned by the State.

• And many more across the world...

Ghana’s Agricultural Development Bank is 51.83% owned by the Government of Ghana with the Bank of Ghana owning the remaining 48.17%.

Last year its net profit on operational activities increased by more than 44.0 per cent to Cedis107.65 billion. It showed a 19.71 per cent growth in total assets to over Cedis 4,103.0 billion , and its total deposits grew by 29.19 per cent to Cedis 2,344.14 billion cedis, and paid dividends to Government totaling 33 billion cedis, an increase of more than 116 per cent over the previous year's dividend payment.

It contributed nearly 9 billion cedis as National Reconstruction Levy and 8 billion cedis in donations to charities.

Its contribution to the Agricultural sector totaled 626 billion cedis and included the finance and procurement of farm machinery and equipment, the marketing, storage and processing of food crops, industrial crops and export crops, fishing, aquaculture, poultry and livestock, agro-processing, the Smallholder Mango Project and the ADB Gold Drive for farmers. It invested for example US2.0 million dollars in the Activity Venture Capital Financing Company to provide top-up financing in support of viable projects and many other funding of Ghanaian businesses.

The ADB is thus more than meeting its objective and contributing greatly to Ghana’s economy.

Agriculture is of strategic interest to the Ghanaian economy and the ADB plays a very important role in financing the development and progress of the sector. Such strategic interest should not be placed in the hands of a foreign bank. It must be clear to any lay person that a private bank which is not a bank devoted to the sector cannot be expected to meet the objectives of the ADB we have outlined earlier.

Divestiture of ADB shares to Stanbic Bank or indeed any other bank which is not a development bank would amount to short -termism of the highest order, and this must be clear to the NPP government also.

Ghanaians are against any attempts to sell ADB shares to a foreign bank as clearly indicated by the reaction of various public bodies:

Workers are against any such sale and The Public Services Workers Union (PSWU) of the Ghana Trades Union Congress (TUC) has opposed any attempt by the Government with its General Secretary Mr Abraham Tetteh Okine, saying” We would like to caution government that the Agricultural Development Bank is playing a crucial role in the nation's agriculture sector which is the back bone of the national economy".

The ADB’s own workers are against with Mr. Sanjay Mirchandani, Pubic Relations Officer of the Senior Staff Association, saying that they were against the sale and that the agricultural sector of the country was of strategic security importance hence the finances of the sector must be entrusted to a truly Ghanaian bank that was owned by government and Ghanaians. Mr. Mirchandani had also pointed out that the ADB had maintained a portfolio of 544.0 billion cedis in 2006 as against only 4.9 billion cedis by Stanbic bank in 2006

That Stanbic Bank’s , share in all banks' total agricultural portfolio had not exceeded three per cent since 2000.

The National Farmers and Fishermen Award Winners Association of Ghana (NFFAWAG) had also come out against saying that it "believed that if the farmers and fishers of Ghana own the said shares, ADB will remain a development Bank to support the cause of farmers in Ghana". adding that "ADB has consistently supported farmers despite the numerous problems confronting us," but "We believe one of the main reasons that motivate the ADB to continue to lend to farmers is because of Government share holding and interest in the Bank". Mr Abayori of NFFAWAG had said that "If the only Agricultural Development Bank is diversified to a foreign interest then the farmers of Ghana are doomed forever”.

A simple example of a tiny fraction of what would be lost to Ghana in addition to financing the Agricultural sector is proceeds from the estimated 400 million US dollars annually transferred through the ADB via Western Union Money Transfer.

The NPP government should forgo its dogma on this issue and listen to Ghanaians for a change. If it does not, this will be yet another nail in the coffin of a failing government.

Communications Directorate – www.cppuk.org

cppuk@hotmail.com cppyouth@gmail.com