The finance and consulting executive said, the central bank’s decision to set regulatory requirements for these banks was laudable and should be encouraged.
He said that many local banks needed support and that the central bank’s intervention to help was timely, adding that the local banks needed more of that technical support.
“What we need is to create that enabling environment for some sort of support to the banking sector to be able to adequately provide that level of support to the national economy. So I am a big advocate for the strict appliance of regulatory requirements, but I am also a big advocate for technical support to strengthen banks that are weak and failing. This regulator is doing a great job and needs to be encouraged, but we want to see more technical support,” Mr. Gustave said.
Mr. Gustave was speaking as a guest at a public lecture organized by Webster University in Accra on the theme; “The role of the banking sector in national development: the case of Africa and Asia.” He said Ghana’s banking sector had seen tremendous improvement over the period, which was good for the economy going forward.
“The banking sector has come a long way. I must say that we have some very strong banks in Ghana. You know even amidst this minimum capital requirement, which is being instituted by the regulator, we still have very strong banks with strong fundamentals, corporate governance amongst the banking sector has largely improved and credit underwriting has improved comparing it to ten years ago.”
“I must say that we have much stronger banks than before. We can do more in supporting the national agenda. It has been a fantastic experience so far, but more can be done,” he said.
He added that the banking sector needed to be stronger in the case of capitalization and urged banks to have an avenue to pull skilled and talented industry practitioners to support. Mr. Gustave concluded that “the whole financial sector requires a lot of focus not only banks but every player.”
Dr. Hung-Gay Fung, Visiting Faculty, University of Missouri in St Louis, USA on his part said that Ghana’s current open module in the banking sector rendered the local banks uncompetitive.
He said the challenge, facing the banking sector was the free competition for both local and foreign banks, adding, the local banks must be given special preference to the foreign banks.
“Foreign banks and local banks compete equally, this module is fair but the problem is that it does not give production to domestic industries. Because when the government implements monetary policy, they need local banks to carry it not foreign banks. So in other to be effective, you need local banks to support the government policies. And in other to support that policy, you have to protect the local banks by making sure the local banks make money so that they can survive in the longer run,” Dr. Fung said.
“In China, they do not give foreign banks license because when you do that, you undermine the competition of the local banks.”
Mrs. Martha Quainoo Amakwah, Director for enrollment for Webster Ghana campus, said that the public lecture was organized to help in bridging the gap between the industry players and academia. She said it offered the platform for open discussion to give students a better perspective of the reality in the field.
The Webster University Ghana Campus, which was established in 2013, has received accreditation from both the National Accreditation Board and the Higher Learning Commission of the US.
The Ghana Campus is also the first in sub-Saharan Africa in Webster's 102-year history. Webster University is an American University based in St. Louis, Missouri, and has a network of American-style residential international campuses in nine countries spanning over four continents.