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 Mr Patrick Wall Mr Patrick Wall , Haltemprice 12:00 am, 4th August 1961

I support my hon. and learned Friend the Member for Northwich (Mr. J. Foster) in putting forward the important concept of a bank for Africa. I believe that the Government have a degree of responsibility both direct and indirect, and I hope that when my hon. Friend replies he will be able to set the seal of general approval on this whole concept.

The purpose of the bank is both economic and political. It will undoubtedly encourage the African to invest his savings. If we get increased African investment in the rather difficult situation which exists in certain territories in East and Central Africa, we will obtain a greater degree of political stability, which in turn will attract further investment and so raise the standard of living of the people in the area.

Starting a bank which is 50 per cent. African will mean training a large number of Africans directly and associating an even greater number indirectly with the scheme. This will tend to bring before them the economic facts of life. Not long ago I was talking to one of the African political leaders in Northern Rhodesia. He was telling me of his ideas for improving the standard of living, the standard of education, and so on, in his country. I said, "Yes, it is all very well, but it will cost money and where will that come from?" His reply was, "Oh, that is easy. We will ask the Americans to open up more copper mines." He said that quite regardless of the fact that there had been a 10 per cent. cut-back in copper development in the territory due to various international factors. I believe that this concept will increase awareness of the economic facts of life among many African people, and that it will bring the political stability which will be of importance in the difficult years ahead.

First, may I adduce some of the economic reasons why I support this concept? These have been ably covered by my hon. and learned Friend, so I will keep my remarks brief. My hon. and learned Friend pointed out that this was a pilot scheme. It was intended to start it in Highfield, the African quarter of Salisbury, and presumably if it is successful it will be extended to Kenya, Northern Rhodesia, and other African territories. My hon. and learned Friend also pointed out that the idea was to encourage deposit banking, and particularly to encourage African co-operatives both in industry and agriculture.

In the memorandum submitted to Members of this House by the sponsors of the scheme, they point out that the average income of the Federation in 1959 was £28 per head of the African population, and about £540 per head for Europeans. I give no guarantee of the correctness of those figures, but I think it is certain that both those figures will rise, and obviously the African income will rise faster than the European. There will therefore be a big scope for African investment in this bank, and indeed in any other bank operating in these territories.

Again, the sponsors point out that their estimate of African moneys in deposit, in savings and in African businesses in Central Africa alone is about £15 million to £18 million. There is, therefore, certainly plenty of scope not only for the existing banks but for the new one.

My hon. and learned Friend said that the concept is that the new bank should be shared fifty-fifty between Europeans and Africans; that the directors should also be equally shared between each race, but that it should always have an African chairman. What particularly interested me in the memorandum which the protagonists of the scheme put forward was the way in which they continually stress the importance of a close relationship with the Commonwealth, and the importance of efficiency and integrity.

They point out in one paragraph that the mere Africanisation of the staff of an international or British bank does not necessarily endear it to the African, because he feels that in the present state of education in Africa it may well lessen its efficiency. On the other hand, if a substantial proportion of the equity of a banking institution is Africanised the African shareholders will be determined that it shall be run on the soundest possible lines and conform to the highest code of administrative discipline and integrity, because they will have a personal stake in that bank. I understand that promises of financial help have come from countries such as Germany, Japan and America. I hope that the desire of the sponsors of the scheme to get real backing from Britain and the Commonwealth countries—backing not only to the extent of financial support but also in know-how and personnel training—will be fulfilled and that this debate will go some way towards publicising these views.

Finally, there is the question of competition with existing British, Commonwealth or international banks in the area. Hon. Members on this side of the House believe in competition, and with the growing amount of investment in Central and East Africa there is plenty of scope for competition, and, as I have said, this expansion of investment will encourage political stability.

It is to the political background that I want to address the rest of my remarks. I wish to make a number of very short quotations. I do this deliberately, because it is important for the House to understand the background to this project. The quotations I wish to put before the House are those made by Africans in Africa. They were made during a conference attended as observers by the hon. Member for Cardiff, South-East (Mr. Callaghan) for the Labour Party and by myself for the Conservative Party. This was the Third All-Africa People's Congress which took place in Cairo just before Easter. It was a conference of African political parties from independent and also dependent Africa.

The keynote was set by the Secretary-General, Mr. Abdoulaye Diallo from Guinea. I am now going a little beyond the purely economic terms of the question, because I want to describe the background of the Conference and bring forward the economic arguments advanced against that background. In his opening speech the Secretary-General said: Today there are two forces existing in the Congo; forces which represent the imperial interests, and forces which represent the interests of the Congolese people. He went on to deal with the dangers of European bases and alliances and the danger, as he put it, of neo-colonialism. He advocated one trade union and one political party for the whole of Africa. What he said on the economic subject was this: What has taken place in the Congo characterises in an obvious way the danger of neo-colonialism. The many attempts at the regrouping of influence in the ancient and new capitals is also obvious. Neo-colonialism can also be seen in several fields, in particular the economic field. As long as the old structures are not modified, domination will continue. The feeling of the Conference was that the colonial nations were on their way out, but that neo-colonialism as exemplified by the American dollar was the new danger. In this connection the Secretary-General said: As for economic development, we have already said that it must be carried out in the interests of the populations. The means of foreign and domestic communications, the means of production must be organised and orientated in that sense. From those brief quotations the House should be able to appreciate the trend of the keynote speech which was certainly liable to the West.

I now want to make two or three brief quotations from African leaders from British Africa at that Conference, referring particularly to the economic aspect. One of the best speeches—because it was an economic and not so much a political one—was that delivered by Mr. James Gichuru, from Kenya. He is Vice-President of K.A.N.U., and he said: After independence we face new and perhaps greater challenges, problems and dangers. The challenges are those presented by our age-old enemies: disease, poverty and ignorance, challenges that are still very much with us although they were supposed to have disappeared under the so-called 'civilising mission' of Europe. By the new dangers that face us today I mean the menace of neocolonialism operating mainly through stooge governments that control our economies—invisible and, therefore, more dangerous. Later he amplified those remarks, and said: Lest I be misunderstood let me make it clear that when I refer to economic imperialism I do not include the normal commerce of one country with another or disinterested aid without strings attached from any country. It can be seen that the African leaders of British Africa are pleading for economic aid for their own bank and their own way of investment in their own country. They are asking for help from us, and are asking us to look at the problem not through British eyes but through African eyes. That point was emphasised by Mr. Tom Mboya, who said: At the moment there are people who look at us with glasses on which is written pro-East or pro-West, anti-East or anti-West. Let those glasses be changed into an African looking-glass that will portray the African personality that will be recognised the moment an African is seen or the moment he pauses to speak. In other words, we must look at the Bank of Africa from the eyes of Africa. I believe that this project will come off. I very much hope that this country will be fully associated with it, because if we do not support it, it will come off without our support.

There are dangers in this scheme—dangers that this finance may be used to support political and nationalistic moves. We must be clear about the dangers. As far as I recall, there were only three direct mentions of the Bank of Africa at the Conference. The longest and most direct—and in some ways perhaps the most politically dangerous—was made by Mr. Moton Malianga, Vice-President of the National Democratic Party of Southern Rhodesia. He said: We have seen that imperialists in many respects have cooled down some of our leaders. All this has been traced to financial strings. With the establishment of a Bank of Africa, economic freedom and independence would eliminate the possible dangers of some of our leaders becoming economic prisoners. The Bank will also help young independent African States which have been dependent on imperialist banks, to ensure that the situation in the Congo, when the Belgians froze the banks, will not repeat itself. That may be a quite legitimate point of view, but it emphasises the fact that if we do not help and offer financial aid and economic know-how this scheme could be used against the interests of the Commonwealth and those of Britain. In this matter we should all work together. The resolutions emanating from this Conference were all short ones which advocated the setting up of a Bank of Africa, and I should like to see the Commonwealth countries make the start.

I hope that I have not wearied the House with too many quotations from this Conference, but it struck me as being an extremely important one, showing that Africa wants to work for itself, and that besides providing finance we must also help the Africans to work out these things in their own way. There is a strong feeling about the dangers of "neo-colonialism" in Africa which we generally find associated with the threat of the American dollar and used for political reasons by our political enemies.

But there is also a great wish among the Africans to follow British tradition, and the tradition of integrity of the City of London. There is a great wish that the City will help in providing know-how and financial assistance. I hope that when my hon. Friend speaks he will be able, so far as it is possible for him, to set the seal of Government approval on this concept of a Bank of Africa, so that it may go forward as a partnership, as envisaged by my hon. and learned Friend, with a 50 per cent. African and 50 per cent. European control, for the betterment of British territories in Africa and for the betterment of the Commonwealth as a whole.