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 Hilary Marquand Mr Hilary Marquand , Middlesbrough East 12:00 am, 4th August 1961

The House is indebted to the hon. and learned Member for Northwich (Mr. J. Foster) for raising this subject. It has been interesting to listen, as I have been listening with a perfectly open mind—not so far having studied carefully the documents on the subject—to all that has been said by hon. Members opposite. Hon. Members on this side of the House approach the subject of banking generally in a manner which is rather different from that of hon. Members opposite.

Our approach leads us more than does theirs to an emphasis on the necessity for public control over banking opera- tions through the law, and to the desirability of having a substantial measure of public ownership in banking operations either through nationally owned institutions or through co-operatively owned institutions. But that does not alter the basic fact that there will, of course, always be the need for short-term banking operations, the sort of job which the commercial banks undertake, raising their money from depositors. I am distinguishing here between the commercial bank operating short-term credit provisions and the investment bank which is concerned with long-term investment, and what I have to say will not be related to the long-term investment bank.

There is a need to finance the movement of commodities. Goods are carried over the oceans and for long distances on land by rail. While these operations go on there is ample need—and it is sensible to provide it—for capital to finance the holding of commodities during transport and other commercial operations. We recognise the need for short-term banking operations and appreciate particularly the great importance of the provision of short-term capital in countries like those of Africa where it is necessary to provide the means to tide the farmer over during the long period between the sowing of his crop and the sale of it.

These are necessary institutions, and all over Africa there are commercial banking organisations run on the joint stock method which provide capital. They raise their finance from depositors. This is unexceptionable. It is necessary and it must continue. Whatever kind of society these emergent African territories may eventually decide to operate they will have to have within their economy provision for short-term finance of this kind. Whatever degree of control they may eventually decide to operate they will have to consider what kind of short-term capital provision they intend to set up.

Undoubtedly it is true as has already been said, that Europeans particularly possess a great deal of the know-how about the conduct of such operations. There is a technique and a know-how which has to be learnt. One cannot just walk into a bank and start to run it. One must be trained in the operation. There are many Europeans in Africa, and no doubt also some Asians, who possess this technique, but there are far too few Africans who have had the opportunity to learn it. I agree with the hon. Member for Worcester (Mr. Walker)—who speaks no doubt with a greater knowledge than I of the banks in the City of London—in regretting that more training was not given by these banks to African employees in their branches so that they might understand more of how this system works; and even how the great financial nexus in the City of London operates as the headquarters of this vast ramification of banking systems throughout the world. I hope that commercial banks will think about this and pay some attention to what the hon. Member said, even though they may attach little importance to what I say, because if what he said is true, they should be doing something on those lines on a larger scale than at present.

I do not think that anyone has suggested that commercial banks already operating in Africa should cease their operations. The suggestion is that their interest might be roused by this debate in the general idea of bringing Africans more closely into participating in the work of the banks. I welcome the interesting suggestion which has been advanced regarding a bank for Africa and I think that it needs careful and sympathetic examination. I find it particularly interesting, because it is associated with the names of leading and highly qualified Africans.

The names which have been mentioned include those of Mr. Chitepo, Mr. Malianga and Mr. Kaunda. I was particularly interested in the project because I saw the name of Dr. Kiano, whom I happen to know fairly well. He is an economist and was a lecturer at the Nairobi college before he became a Minister; and, of course, he is a political leader of considerable status in Kenya. The fact that such men are associated with this idea makes it particularly valuable and one which deserves careful consideration.

I agree with much that has been said about the interest that ought to be shown in this project by the new Secretary for Technical Co-operation. I said in the debate on the Bill to establish that new Department that I hoped that it would be a forward-thinking Department and one that would be interested in new ideas, would inspire them and follow them up. I have no doubt that the Under-Secretary of State will take the opportunity of saying that he will consult his right hon. Friend about this idea.

The Colonial Office can be directly concerned with this matter, I imagine, only at a later stage. For the time being, it certainly seems to be one which the new Secretary for Technical Co-operation might explore and his Department is well staffed now with persons who have experience of Africa—particularly its Director-General—so that between them they ought to be able to help this idea along.

I am not in any way committing myself, nor I think is anyone else, to a detailed endorsement of the plan which has been put forward, but I am saying that it is interesting, it has the sponsorship which we can recognise as both responsible and well-informed, and it deals with the provision of services which will be necessary whatever form of society the Africans eventually decide to establish in their independent territories. We have listened with great interest to what has been said, and I feel confident that the Government will do what they can towards forwarding this idea.