- Ghana | 15 November 2015
Can you provide an overview of Barclays in Ghana?
Barclays has been operating in Ghana for 95 years and has been the leading bank in the country for much of that time. We experienced rapid expansion in 2006-2007, but suffered losses in 2008-2009 due to insufficient controls. However, we restructured and became more efficient, dropping from 154 outlets to only 82 today. As a result, we were the most profitable bank in Ghana last year.
What is Barclays Ghana’s relationship with the oil and gas industry?
Barclays has a significant history with the oil and gas industries due to its long-standing presence in the country. Ghanaian laws limit the exposure of small banks, preventing them from lending too much money to one party, so large banks like Barclays must get involved in funding big-ticket transactions. We have also supported oil distribution companies since the liberalization of oil imports. As one of the biggest global banks, Barclays has a significant oil and gas franchise run out of Houston. While some financing is done there, we complete many transactions independently as Barclays Ghana depending on the size and economics of the deal at hand.
How do you think the influx of other large international banks into the Ghanaian financial space affects Barclays’ development targets?
While competition will always have some impact, there are very few banks that can actually compete with Barclays when it comes to the oil and gas sector. We have a strong local presence backed up by nearly a century of experience in the country, as well as the global reach of Barclays. These are unique qualities that set us apart from the rest.
Foreign investors have been quite concerned about the depreciation of the Ghanaian cedi; does this trend reflect the overall health of the country’s economy?
Investors are after returns, and they only care about the exchange rate to the extent that it dilutes or affects their return. The rate of depreciation is not an issue in itself; if the currency is depreciating at a predictable rate, but the yields are higher than the rate of depreciation, there is still a net gain. As long as the yields stay ahead of the rate of depreciation, we will be able to attract investors.
While foreign investment in Africa as a whole is down, it continues to rise in Ghana; why is this?
Ghana is particularly attractive due to greater political stability in the last 20 years than most other countries in the region, a solid rule of law, no terrorist activity or civil strife, and a strong democracy. Additionally, Ghana has one of the most diversified economies in Africa, relying not solely on diamonds or copper, but a combination of gold, oil, cocoa, and agriculture. All of these factors combine to make Ghana a robust nation and a haven for investment in West Africa.
What is the financial outlook for Ghana in 2015?
The depression of the cedi has been an issue, but the government has taken aggressive steps to combat this. We expect interest rates to increase, which should bolster investor confidence that actual yields are higher than the rate of depreciation. Inflation will likely follow because many goods in Ghana are imported, and when the cedi devalues, things become more expensive locally. However, the government has declared its intention to invest heavily in infrastructure, which should lead to a surge of activity and hopefully translate into higher economic activity in the larger Ghanaian economy. The election this year should come and go without any resulting economic hiccups, so we believe it will be another strong year for GDP growth.
Can you tell us about the role that Barclays plans to play in the further development of Ghana’s economy?
At Barclays, we believe that it is our responsibility to continue to invest in the future of Ghana. One of our core values is the idea of citizenship, which means being a responsible corporate citizen in the countries where we operate. We are passionate about this value on a global scale, and we see our fortunes as being inextricably linked with those of Ghana. As a financial intermediary, we see our role as facilitating growth and providing support to the country in any way we can. Our actions demonstrate our commitment to this goal, and if we have the expertise to contribute to Ghana’s development, we will do so without hesitation.
Some companies refer to this as corporate responsibility. What does the term citizenship mean to Barclays?
While other companies may use the term corporate responsibility, we prefer to think of ourselves as citizens of the countries where we operate. For us, citizenship means taking an active role in the communities we serve, investing in their future, and contributing to their growth and development. We see this as not only our responsibility but also our privilege, and we are committed to fulfilling this role in Ghana and around the world.
Can you give some examples of how Barclays has demonstrated its commitment to Ghana’s development?
Absolutely. We have been working closely with the government of Ghana and other stakeholders to support the country’s economic development. For example, we have provided financing for major infrastructure projects such as the expansion of the Kotoka International Airport and the construction of the Bui Dam. We have also partnered with local organizations to promote financial literacy and entrepreneurship, which we believe are critical to building a sustainable economy. Additionally, we have supported various social initiatives, including healthcare programs and educational initiatives. We are proud of the progress we have made in Ghana so far, and we remain committed to continuing to invest in the country’s future.