Capital Adequacy regulations require that Banks keep 9% of their assets in primary reserves of cash lodged at the Bank of Ghana, and a further 35% in secondary reserves of Government securities and maturities (our understanding is also that there is a Government of Ghana stipulation that 15% of secondary reserves be held in long-term government bonds.)
Foreign aid should be tied not on promises of African leaders but to the establishment of a few critical institutions:
+ An independent central bank: to assure monetary and economic stability, as well as stanch capital flight out of Africa. If possible, governors of central banks in a region, say West Africa, may be rotated to achieve such independence. The importance of this institution resides in the fact that the ruling bandits not only plunder the central bank but also use its facilities to transfer the loot abroad.
+ An independent judiciary -- essential for the rule of law. Supreme Court judges may also be rotated within a region.
+ A free and independent media to ensure free flow of information. The first step is solving a social problem is to expose it, which is the business of news practitioners. The state-controlled or state-owned media would not expose corruption, repression, human rights violations and other crimes against humanity. In fact, it is far easier to plunder and repress people when they are kept in the dark. The media needs to be taken out of the hands of government.
+ An independent Electoral Commission to avoid situations where African despots write electoral rules, appoint a fawning coterie of sycophants as electoral commissioners, throw opposition leaders in jail and hold coconut elections to return themselves to power.
+ An efficient and professional civil service, which will deliver essential social services to the people on the basis of need and not on the basis of ethnicity or political affiliation.
+ The establishment of a neutral and professional armed and security forces.
By contrast, UK banks are required to maintain 0.15% of capital on deposit with the Bank of England. This is key, as money maintained with a central bank isn't available for lending, and in fact drives deposit rates high - encouraging the saving of cash, but discouraging riskier investments.
China - a decidedly non-western state - is making great inroads recently and quietly by making strait trades of resources for cash that require no additional IMF type western ideology, no grand military necessity via proxy or otherwise, and no demands for cultural adhesion to anything other than the completion of the business deal.
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