An unwanted catalyst for securing Ghana’s banking sector logistics
Security in Ghana’s financial sector has been placed under the spotlight following several daring and deadly attacks. Banks, the Bank of Ghana (BoG) and the Ghana Police Service are in talks about how to reduce the risk of cash-in-transit (CIT) operations. A poorly implemented policy presents risks for businesses in the sector but there are also opportunities. Among them, engaging local vehicle manufacturers, improving processes, and continuing the drive to a less cash intensive economy.
Significance – Perceived and actual risk
Media reporting has put the number of attacks on cash-in-transit (CIT) vehicles at at least four in the first half of 2021. Two of these involved fatalities of policemen acting as escorts, a service offered at a cost by the police. The effect on public sentiment has been palpable, especially as it comes at the same time as other high profile armed robberies. A seemingly impassive response by the Inspector General of Police (IGP), James Oppong-Boanuh, to the most recent incident has also galvanised a larger public outcry than might otherwise have been expected. He told a reporter: “even in the USA, UK, and Sweden, where they, more or less have everything, they still have crime. The only place that doesn’t have crime is heaven and we are not in heaven.”
Speaking with a branch manager of a major retail bank in Accra, we were told that the fear extends even to bank workers: “my staff don’t even want to meet the so-called bullion vans any more, lest they are attacked, and robbers attempt to enter the bank itself. I understand that cash still reigns supreme in Ghana here, but this just shows how important the current push toward a cashless economy is.”
A memo from the BoG in December 2020 gave financial institutions up until 1 July 2023 to procure appropriate armoured vehicles for their CIT activities. It called for them to involve BoG in the procurement process to ensure that all specifications are met. However, it seems that there has been a dereliction of duty amongst all stakeholders. Banks have made little progress towards the procurement of the necessary vehicles, the BoG does not appear to have followed up with banks, nor offered the necessary support, and the police have not delivered on promises to make sure that all its officers were provided with the requisite equipment e.g., bulletproof vests and helmets. Additionally, following the recent attacks, the police have been quoted saying that they will withdraw their officers from escort duties by the end of June if the banks vehicles are not in service.
Ghanaian security risks should be seen in context. For example, per United Nations Office on Drugs and Crime statistics, the homicide rate for Ghana is 2.1 per 100,000 population compared to 12.9 in Africa as a whole, 3.1 in Southern Asia and 21 in South America. However, the authorities’ inability to enforce policies expeditiously penned policies can and does lead to an elevation of perceived and/or actual risks in Ghana. This has the makings of one such situation. The comments by the IGP also are indicative of a trend of government officials appearing to have grossly misread public sentiment and can be added to recent comments by the finance minister[1] and the minister of defence[2].
Outlook – A long lead time
The threat to withdraw police officers is likely to be an empty one. The lead time for procuring a significant number of such vehicles will be counted in months rather than days or weeks, and come with significant associated costs. Many banks outsource their CIT operations to third parties so negotiations will need to be held with them around the upgrading of their fleets. Whilst these actions are taking place in the background, the risk of attacks on CIT persists. Leaving banks and CIT specialist companies to face this risk alone whilst knowingly ill-equipped would go significantly against the grain of public opinion, as did the statement of the IGP.
The positive is that the public consternation on the matter has already spurred some immediate action. ARB Apex Bank has authorised the purchase of 12 armoured bullion vans at a cost of GHS 32 million (USD 5.5 million), primarily for its rural operations. Opportunities also exist for the further bolstering of Ghana’s nascent and rapidly growing automotive sector. The only domestic manufacturer of cars, Kantanka Automobiles, has already engaged four banks around the possibility of it assembling CIT vehicles locally according to its CEO.
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[1] My stay in U.S. hospital opened my eyes to need for investment in Ghana’s health system – Ofori Atta. (2021, 4 May). Ghana Talks Radio.
[2] Akufo-Addo can’t even shower in presidential jet – Nitiwul defends President’s alleged extravagant foreign travels. (2021, 16 June). Myjoyonline.com.
*Photo credit: Songhai Advisory, downtown Accra
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