Ghana Commercial Bank faces a challenging future as it gears up for privatisation. Mike Afrani reports on the trials ahead, and the rather bizarre way the timetable for divestiture was announced...
Sunday is not traditionally the time for details of a privatisation to emerge, but as Ghanaians families gathered around their televisions to watch their favourite soap-opera, Obra, little did they know that their evening's entertainment would include the revelation that Ghana's oldest and most respected bank, the Ghana Commercial Bank (GCB), is just about to be privatised.
One of the 264 companies on the Ghanaian Government's list for privatisation, everyone knew the Bank would be sold, but no one knew when. It took the television drama to alert the public to the immediacy of the timetable.
GCB is already on the market and shares will be floated to both local and foreign buyers from 26 February to 26 March, in accordance with Ghana's IMF/World Bank sponsored Economic Recovery Programme.
Wholly owned by the Ghanaian Government, the GCB was established in 1953, and known as the Gold Coast Bank. It acted as Ghana's Central Bank until 1958 when the present Bank of Ghana was built.
The importance of the sale cannot be underestimated. Of 16 local and foreign banks existing in the country, GCB is the largest. It alone controls 40% of the country's deposits. Geographically and sectorally, this purely commercial bank is also the most widely spread.
It has 146 branches throughout the country, while the next biggest competitor, the Social Security Bank, formed with the social security contributions of workers, has a mere 52. GCB is involved in agriculture, industry, trade and commerce, and construction - almost all aspects of Ghana's commercial life.
As we go to press, the Ghanaian public is still in the dark as to how much of the Government's 100% stake in the Bank will be put up for sale.
But unimpeachable sources inside GCB have told African Business that 60% will be floated; 30% in a public flotation, and 30% taken up by strategic foreign investors.
Local brokers have hinted that Standard Chartered Bank (UK), the Commonwealth Development Corporation (CDC) and some firms from Malaysia are some of the strategic foreign investors expected to take a share in GCB.
The floatation comes as the latest in a long line of measures designed to transform and strengthen Ghana's financial sector.
Ghanaian banks were in a bad way by the late 1980s. With the assistance...