There’s no such thing as a plug-and-play financial system. The regulations, institutions, expertise, and norms that serve as the infrastructure for a country’s economy must be built. In Ghana, one of the people creating the practices and values shaping the country’s financial and economic system has been Ken Ofori-Atta ’88, who twice chose to leave lucrative jobs in order to have a greater impact on his home country.
Striking out on an uncertain path is difficult but rewarding, he says. “One of my favorite Bible verses is 2 Timothy 1:7: ‘The Lord gave us a spirit not of timidity but of courage, love, and self-discipline.’”
In January of 2017, Ofori-Atta, a veteran of Wall Street and a pioneer of financial services in Ghana, joined the country’s new presidential administration as finance minister. He was charged with making rapid change in a country that required a $918 million IMF bailout as recently as 2015.
Over the last two years, the nation’s deficit and debt have shrunk, and growth has more than doubled. Standard & Poor’s has for the first time in a decade given Ghana a ratings upgrade, to B with a stable outlook. The World Bank named Ofori-Atta “Africa Finance Minister of the Year” for 2018 and appointed him chairman of the bank’s Development Committee.
“It has been a torrid 24 months, but Ghana is now seen as a much better place to do business, and there’s a renewed sense of hope,” he says. “It’s exciting seeing how we can transform our society for the good of the majority of our people.”
While his family has a tradition of public services—three of the “Big Six,” the founding fathers of Ghana, are family members and his father was a member of Parliament and deputy finance Minister—when he left Ghana for college in the United States, Ofori-Atta had something different in mind. “I was on the Wall Street track.”
He got an undergraduate degree at Columbia, then a job with Morgan Stanley. He chose Yale SOM for business school, a decision that, in retrospect, he believes hinted at and enabled the path his career would take. “I think there was some subliminal awareness that in choosing Yale, in wanting to engage with the experiment being tried at SOM on public and private management, that I would find my way to the public sector, too.”
But immediately after graduation, he returned to investment banking with Salomon Brothers. At one point he hadn’t been home in a decade. “I was a New Yorker. I was so much an American that I wasn’t thinking of Ghana. I thought I had exorcised Ghana from my DNA.”
But, with his chosen career path secured, he made his first visit home. “It really caught me on the blind side. I was struck with a sense of nostalgia, and how easy it was to catch up with my friends. I got back to New York quite unsettled. I had to re-examine myself and ask why.”
That led to a series of exploratory trips to Washington, D.C. Looking for a way to return to Ghana, he visited the World Bank, the IMF, USAID—any organization doing economic development work there. “I couldn’t justify returning because I didn’t know what I would do.”
Ofori-Atta talked with friends and Yale SOM classmates who dared him to simply do it. Their goading support and a “feeling that I would make more material difference to society” gave him the courage to walk away from Wall Street without a defined next step.
After some searching, in 1990, he partnered with James Akpo ’89 and Keli Gadzekpo, the brother of another Yale SOM alumni, Frank Gadzekpo ’89. They borrowed $25,000, rented one little room in Kantamanto in the center of Accra, and created Databank, a firm that now has over $500 million under management. “It was going to be a research hub for information aimed at foreign investors,” Ofori-Atta says with a wry laugh. “We quickly found out that we couldn’t live on that because nobody was buying information.”
At the time, there was opportunity for private-sector businesses and foreign investors in Ghana. The government was pushing a wave of privatization. The Ghanaian stock market launched in November 1990, and the team decided to build a financial services company that could grow with it. But the theoretical clients weren’t finding their way to Databank’s door.
The partners realized part of the issue was that there wasn’t sufficient financial sector expertise or infrastructure in the country, so they registered as a stock brokerage. They created the first index for the Ghana Stock Exchange. They began to do training for capital markets-related issues as well as asset management, trading, advisory services, and IPOs.
“Databank was built on the ideals of valuing and respecting people,” Ofori-Atta says. “Yale had inculcated a model of leadership built on excellence, the humility to learn, and integrity. I think that was helpful in the transition from the U.S. to Ghana.”
According to Ofori-Atta, there was a lot of lucrative, government-led corporate restructuring work related to privatization at the time, but Databank sidestepped that line of work, because “we weren’t comfortable with the demands that came with it. It became quite clear to us that the capacity to shut you down is a lot easier if you’re dependent on government transactions.”
The uneasy situation continued for several years. “In 1994, we did a major transaction that, for the first time, brought emerging market fund money to the Ghana Stock Exchange.” The deal sold government-owned shares in 11 companies to international investors. It led to Databank trading about 60% of the entire stock exchange in one day!”
When the deal was complete, though, “the government decided not to pay us because we did not have the correct political color. We knew that if we wanted to compromise ourselves, we would get paid.” (Ofori-Atta notes, “We were on both sides of the trade, so we did make some money from the buy side.”)
The incident led to a decisive choice. “It was difficult, but we resolved to stay away from government work. We would not engage in government business anymore. We focused on creating and championing a mutual fund industry in the country and choose to subject ourselves to the whims of the market instead.” It wasn’t a decision that yielded an immediate payoff.
“There were slow times at the beginning, but I think Databank is a lot more resilient for having taken leadership in building the industry,” Ofori-Atta says. “That early choice has helped to maintain the integrity of the firm.” The firm and Ofori-Atta were honored twice by PWC as the most respected company and CEO in Ghana.
As it developed into a full-service investment bank, Databank expanded into other parts of Africa, including a presence in The Gambia and Liberia, a pan-African mutual fund, and a private equity fund focused on food value chains in Africa with investments in Madagascar, South Africa, Zambia, Zimbabwe, Cameroon, Burkina Faso, Ethiopia, and Nigeria. The company is also in a joint venture with Prudential Insurance in Ghana, and provides stock brokerage, corporate finance, asset management, and research services.
For a long period, the company’s success paralleled Ghana’s overall development. From 2000 until 2013, Ghana saw strong GDP growth. The economy is driven by cocoa bean production, gold, and, increasingly in recent years, oil development, so commodity prices have a significant impact on the country. When global prices for all three key exports fell, coupled with governance challenges, it faced a currency crisis and electricity shortages that led to the IMF bailout in 2015.
In the face of that economic tumult, Ofori-Atta again pushed himself toward uncertainty. “The economy in Ghana had gotten so bad under the past regime that I asked myself whether to continue in the comfort of being the executive chairman of Databank, aloof to the politics of the nation.” He adds, “Too often, we know that we can do much more but out of selfishness or fear we demur and dither and deny the Republic and society our best.”
Ofori-Atta talked with his wife, Angie, about the best course. He also drew on his time at Yale SOM for guidance, “My experience at Yale and the Henry Crown Fellowship Program at the Aspen Institute led me to believe that it was worth pushing the envelope for something I truly believe is the best use of my talents, especially if it will enhance social justice.” It was time, he decided, “to move from the comfort of personal success to significance.”
They gathered their children to announce, “Well, Dad will not be employed anymore.” Ofori-Atta says, “I decided that integrity called for more than just a compliant citizen. I resigned from Databank and all my commercial commitments to join the opposition party as a strategist and fundraiser.” He added, “It was the moment to be in the arena. It was my time to serve the Republic as the Lord had also blessed our family enormously.”
Unusual in a volatile region, Ghana has held fair and competitive elections since it returned to democracy in 1992. Ofori-Atta says, “I put my heart, head, and hands into it, and fortunately, we were successful in changing the government.” On December 7, 2016, Nana Akufo-Addo won the presidency, his New Patriotic Party took just over 60% of Parliament, and he named Ofori-Atta as his finance minister.
In addition to making economic progress, the administration has pushed to end corruption. “I’ve found incredibly capable public servants who have bought into our vision of excellence and the idea that visible results are our reward. But we also had to appoint a special prosecutor to begin to look at political and public service corruption. The problem is rampant. It’s almost like the country needs cognitive therapy. We need a groundswell saying corruption is imperiling the citizens and their republic.”
Ofori-Atta says that he is already seeing a difference in the self-image of Ghanaians.
“Change will take time, but we are beginning to see national pride come up,” he says. “We are building the country’s self-confidence and expanding its capacity to achieve. That process should build on itself”
Ghana will exit the IMF loan program this year and issued a $1 billion, 30-year Eurobond for the first time in its history, Ofori-Atta adds. The nation is moving toward “President Akufo-Addo’s vision of a Ghana Beyond Aid—a prosperous, self- confident society, leveraging on all its resources for the good of all its people. The Black Star of Africa is indeed beginning to shine again.”
Interviewed on October 1, 2018