Govt, BoG commit to offload stake in ADB
The shareholders of the Agricultural Development Bank (ADB); Government of Ghana and Bank of Ghana (BoG) have given their strongest indication yet to let go their stake in the bank.
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The move forms part of efforts to recapitalize the bank to enable play its role more effectively as a major financier of agricultural development projects as per the mandate that set it up as well as remain competitive among its peers in the highly competitive banking sector.
Although it is not clear how much each intends to offload, the two shareholders have pledged to offload their stake on the local bourse to allow indigenous Ghanaians to have a stake in the bank.
Hitherto, past governments had attempted to get a strategic partner to take over the bank but for the public uproar against such move which made it impossible.
“I wish to state that government genuinely supports the plan initiated by the outgoing Board of Directors prevail on the shareholders of the bank to offload their shares through share floatation on the Ghana Stock Exchange,” Trade and Industry Minister, Mr Haruna Iddrisu said on the sidelines of the inauguration of a new board for the bank.
According to him, the government committed itself to that bid and would work with the new board through the various steps required to arrive at the objective of raising capital through the GSE.
With regards to the stake held by the BoG in the bank, the minister described the situation as a conflict of interest since the central bank was in the position a regulator and at the same time a player with shares in the bank.
“BoG will be encouraged to divest its shares in ADB since BoG cannot be both a regulator and a player,” he said.
The Governor of the BoG, Dr Henry Wampah has however given positive indications of a possible pull out of ADB in due course.
He explained that currently a committee comprising ADB, BoG and the Ministry of Finance were deliberating on the way forward.
The Governor was however optimistic that in a few weeks something definite would come out of the deliberations and would be more geared towards the bank listing on the GSE.
ADB commenced business with an authorised share capital of GH¢3,000 (then GH¢30 million) but is now operating with a share capital GH¢75 million made up of 25.0 million shares.
Much of these shares were not issued for cash and, in the current scheme of things ADB will require a much larger capital base to make much more meaningful impact in its operations and be able to compete favourably with its peers in the industry.
ADB’s new Board
The new board sworn into office has Nana Soglo Allon IV as its chairman with Mr Abdul-Samed Iddrisu, Mr Maurice Tanko Abisa Seidu, Ms Nancy Dakwa Ampofo and Dr Samuel Kofi Dapaah as members.
The rest are Managing Director of the bank, Mr Stephen Kpordzih, Mrs Caroline Otoo and Major (RTD.) Mahama Samuel Tara.
They were sworn in by Mr Iddrisu on behalf of the Minister of Finance, Mr Seth Tekpeh and charged them to provide the needed leadership required to turn around the fortunes of the bank.
Brief on ADB
In 1964, Bank of Ghana set up a Rural Credit Department to prepare the necessary legislation, plans and procedures for the establishment of a specialized bank for the provision and administration of credit and other banking facilities in the agricultural sector.
In 1965, Parliament passed The Agricultural Credit and Co-operative Bank Act, 1965 (Act 286) which incorporated a bank under that name.
In 1967, National Liberation Council Decree (NLCD 182) was passed to change the name of the Bank to Agricultural Development Bank (ADB) and amended certain sections of the original Act to allow ADB to undertake the acceptance of deposits on current and savings accounts and transact banking business normally carried on by commercial banking institutions, including raising loans from foreign sources.
In 1970, The Agricultural Development Bank Act, 1970 (Act 352) was passed to broaden the Bank’s functions. ADB was granted a full banking license in that year under the Banking Act, 1970 (Act 339).
In 2004, ADB gained a Universal banking license under Banking Act 2004 (Act 673) which removed restrictions on banking activity.
From its original Head Office on Tunisia Road, ADB moved to the Ring Road Central, then to the Cedi House on Liberia Road in 1993, before finally settling at its current ADB House Head Office premises on Independence Avenue in 2005. GB
By Jessica Acheampong/Graphic Business/Ghana