Bank of Africa

Part of the debate – in the House of Commons at 12:00 am on 4th August 1961.

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Photo of Sir John Foster Sir John Foster , Northwich 12:00 am, 4th August 1961

On the Order Paper there is a Motion, standing in my name and the names of some of my hon. Friends, which can be divided into two parts. The first part welcomes proposals for increasing African participation in the main banking houses and other financial institutions in the economy of Africa, and the other part refers to a project for the establishment of a bank in which Africans as directors and shareholders will take the lead. I want to address myself to the last part of the Motion.

The project, which is known as the "Project for an African Bank", is still in the formative stage. It emanated from African nationalist leaders, and, of course, it is subject to modifications when negotiations and arrangements proceed. As at present envisaged, the project is that a pilot bank should be created in Salisbury, that the capital should be some £250,000, and that the issued share capital should be provided, and if necessary must be provided at this stage, from European sources, but that half the share capital should be held, so to speak, on option, for Africans to subscribe when the project has succeeded. If, as is envisaged, early success should come to the bank and its banking operations, the proposal is that the shareholding should be more or less 50 per cent. European and 50 per cent. African.

It is proposed that the board should be divided between Europeans and Africans, with the chairman an African so that it will represent to the Africans an African bank. Necessarily at this stage, the know-how will be provided by Europeans. The project must not be confused with any idea of Africanising the personnel who run the bank. The bank will be training Africans to take over positions of responsibility, but that will probably take a considerable time, during which Europeans will exercise their know-how in running the bank.

At the present stage of the training and capabilities of the African personnel, there would undoubtedly be more reason for Africans to make their deposits in this bank than if the bank were completely African from top to bottom, and that is recognised by the African personalities who have put forward the project.

To begin with, the bank would use its share capital and the deposits which it hopes to attract from Africans for discounting good bills of exchange and in general using its finance in a very conservative way. There is a parallel proposal that a similar type of bank should be established in Kenya, and the fact that these proposals have been made by the nationalist leaders and that this opportunity of a debate in the House has been secured have been widely welcomed in Kenya.