GNAT plans to establish commercial bank

Foster Buabeng, Chief Executive Officer of the Teachers’ Fund

The Ghana National Association of Teachers (GNAT) has strongly reiterated its intention to establish a commercial bank as a viable investment portfolio for the Teachers’ Fund.

According to the teachers’ union, the idea to establish a commercial bank was hit with some challenges in the past but the idea has been concretised now, and the necessary procedures necessary for licence acquisition are being pursued.

Foster Buabeng, Chief Executive Officer of the Teachers’ Fund – a retirement supplement and solidarity scheme for teachers, indicated that initially it wasn’t easy for the fund to raise the required minimum capital for establishment of a commercial bank, which stands currently at GH¢400 million, but a strategic plan has been devised to ensure the minimum capital amount is realised.

“If you look back you will realise the minimum capital for banks was GH¢60million, moved to GH¢120million and is now GH¢400million; so as part of our strategic plan between 2021 and 2023, what the trustees of the Teachers’ Fund are planning to do is set some funds aside for such purpose.

“So now we have created a Sinking Fund, whereby we are pulling resources into it; and the expectation is that by 2022 to 2023 we will be able to meet the minimum capital requirement, and go to the regulator, which is Bank of Ghana (BoG), for a licence to operate the bank,” he said on the sidelines of GNAT’s 90th Anniversary Business Forum held under the theme ‘Beyond the Teachers’ Fund: Making our Teachers Economically Sound’.

He added that beyond meeting the minimum capital requirement, there is a need to capitalise the bank to a certain level so that it can rub shoulders with the earlier banks and foreign banks. “The expectation is that we have to grow its capital to say about GH¢2billion or GH¢3billion to be able to compete and also become a market leader in Ghana, because the plan for the fund is to capture some key sectors of the economy,” he added.

Responding to who the target market of the bank will be – either for teachers only or other unions – he reiterated that the moment an institution is given a commercial banking licence, then it means it has a universal banking licence and is able to engage in any legal viable business, so it will be for the general public and not teachers alone.

Further, at the end of the day, the bank will also be relying on other people’s money because, currently, funding is only from members of the association; but when it is opened up, then funding can be acquired from other sources.

Mr. Buabeng emphasised that as teachers they may not have the skills and technical know-how to run a bank, and so will partner with a strategic investor who will be in charge of the bank’s day-to-day business.

National President of GNAT, Philippa Larsen, in her address reiterated that over the years GNAT has made several efforts at putting in place policies and programmes which would minimise, if not eradicate, the suffering of teachers.

“GNAT is here to break new ground through this GNAT Investment Forum that is part of our 90th anniversary celebration. We are thinking outside and around the box. We want to open more opportunities for our members to improve their own economies for a better and more sustainable life,” she said.

Economist and Guest-Speaker Kwame Pianim emphasised that the goal of the Teachers’ Fund (TF) is attainable if only there is a united front at the GNAT level and sound selfless management at Teachers’ Fund level for the good of all. He urged the association to also consider retirement homes for teachers, with the Teachers’ Fund as an off-taker.

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