A new political party in Ghana is proposing a radical reform of the country's banking sector that would see the government establishing banks that would issue letters of credit (L/Cs) to support public sector projects.

This is one plank in the strategy of the National Liberation Congress (NLC) that says it would "run Ghana like a business entity and not as a sole proprietorship business that all previous governments have been doing," according to the party's founder and leader, Stephen Atubiga.

New banks

The NLC intends to establish new banks to guarantee funding for every sector of the economy and to revamp all structures in the country, Atubiga told a press conference in Accra last week.

He says the NLC would collaborate with nationals and foreigners to establish banks in Ghana with the express purpose of financing all sectors of the economy.

"This means, all ministries will have banks funding all projects or the commercial section[s] of all government ministries," he said.

Parliamentary approval of L/Cs

At the same time, the NLC would abolish government budget allocations to all ministries except the education ministry, "to enable [each of] them to run like a business entity," according to Atubiga.

He said the finance ministry would issue L/Cs to all ministries to support all projects. Government contractors or ministries wanting an L/C from the finance ministry would first need to go to parliament to obtain approval for the L/C.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.