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

I am much obliged.

The bank, which will have this European know-how, will aim at attracting African deposits throughout the territory. One of the advantages which will accrue through this project is the indication that prominent Africans are anxious to adopt a European banking system. Some of their followers inevitably put forward wild schemes for expropriating everything that is European. We know that the African leaders do not share that extreme view and if this scheme for an African bank gets a favourable response and the capital required, the more extreme followers would be shown that the only way to economic progress and stability in Africa is through the adoption of European banking institutions.

I was saying that the project has received a great deal of publicity in Africa, and the fact that it has been debated today has also been greatly welcomed. I have a copy of the East African Standard for yesterday, Thursday, 3rd August, in which the headline is: Kenya Plan for Bank of Africa". It says that a branch may be open within the year. Reference is also made to my Motion, which is also welcomed.

It may be asked whether the existing banking institutions, mostly English banks, would not be confronted by competition which they would not welcome. It is undoubtedly the fact that existing banking institutions have been going ahead developing the African side, if we can call it that, of their banking operations. They have been opening branches further up-country and attracting African deposits, but the fact remains that many Africans have savings which they keep in their homes and do not entrust to banks. It has been accepted by many banking institutions in the City, to whom this project has been mentioned, that if those unfruitful deposits could be deposited in the bank in order to fructify for the Africans, it would be welcome to the banks of the territory as a whole.

This debate shows that the House recognises the importance of the project, and recognises that these African leaders have produced a plan which is nonpolitical, in the sense that the bank is meant to attract a deposit from Africans and non-Africans equally. The only political element is that it is envisaged that there should be African directors and African shareholders. If it is successful, it is contemplated that in time Africans should take over many of the posts of responsibility for which there are not at the moment a sufficient number of trained Africans. In East Africa, the fact that this project has been put forward has already very much improved the climate of the attitude of the Africans who are politically conscious of the financial institutions which already exist.

Thanks to our policies and to the general economic upsurge in Africa, it is an undoubted fact that the standard of life of the Africans is rising. It is calculated that in the Central African Federation about £17 million to f18 million of African deposits exist in the existing institutions. There is more to come out from the homes of the Africans, and if the bank is well run it will undoubtedly help the economy of Africa.

If the Africans have a 50 per cent. shareholding, they will be very intent on the bank achieving the success which its sponsors hope it will. It is undoubtedly true, too, that the Africans will look on this as a test of their ability to come into the general financial system of the European and make a success of a bank which will be predominantly African in the sense that it will have at least 50 per cent. African shareholding, and in the end perhaps a majority of Africans on the board, and from the inception of the scheme an African chairman.

For those reasons I warmly commend this scheme to the House. I commend it on the grounds that this scheme has been thought out and composed by the African leaders. Mr. Chitepo may be said to be one of the originators of the scheme, and Mr. Kaunda has given his approval to it. Mr. Chitepo drafted perhaps the first memorandum when it was regarded as a scheme very much in the future. However, it appealed to the imagination of the Africans in Central Africa, and since then the project has assumed a much more concrete form. Dr. Kiano also helped with the preparation of the Memorandum, and Mr. Gekundo and Mr. Nkomo have assisted with suggestions.

That is one of the reasons why I commend this project to the House for its approval and to the Government for their approbation. It shows that the Africans, by putting forward a project of some imagination, and one which can only be of benefit to the economies of the various countries, have assumed a responsible attitude and one which recognises that the European financial system of banking operations is necessary for the continued progress of the economies of these countries.