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DUE DILLIGENCE, APPLICATION AND CHALLENGES IN WEST AFRICA

DUE DILLIGENCE, APPLICATION AND CHALLENGES IN WEST AFRICA

I have decided to consider West Africa in its entirety in the above mentioned theme, but will narrow down to Ghana, my homeland. I also appreciate the fact that some of the issues I am going to discuss in a short while might not be specifically the case in other parts of the continent, but you will agree with me that, it will basically be the same and not much in variance.

The concept of Due Diligence is the ability of a person or an institution to get adequate information to be able to arrive at an informed decision(s) in respect of a potential relationship with a person or an institution. It could be in the area of business contracts, partnerships, investments, banking, project financing and other non-financial perspectives which are more towed to social interactions and relationships such as marriage, religion just to mention but a few.

In West Africa and for most tribes in Ghana, Due Diligence has been and still plays a crucial role in all aspects of our custom, culture and tradition(s). It would be erroneous to quickly conclude that the concept is not known. Due Diligence is put to good use in almost all aspects of the way of life of the Ghanaian. One area I will want to discuss is the area of traditional marriage. In almost all the cultural settings in Ghana, marriage is one area where a lot of Due Diligence is conducted. It is very important that information is obtained first by those dating and potential spouse from the onset of the relationship to find out who they are about to date and consequently marry (Basically to find out if they are already married, have children with other women or basically a person that cannot be taken serious). You will agree with me that this is Due Diligence. The underlying issues are to get all the information needed for a decision to even start or commence a relationship. Then the next stage will be for the families of both potential spouses as noted above, to probe further into the respective families that are to be bound in marriage (In this part of the world, marriage goes beyond a relationship between two ‘love birds’ but a subject of which families play a crucial role). As part of the probe, families will want to find out if the marriage is in actual fact feasible between the couples to avoid taboos such as incest, as well as find out if there are some known hereditary ailments associated with the families. I agree that in modern day, these things are not adhered to as stringent as in the past; the era prior to modern day civilization. It will however interest you to note that, some of these traditions; customs/cultures have been polished and incorporated into the legal framework of most countries in the sub region.

All the above mentioned is aimed at establishing the fact that the concept of Due Diligence is not new in West Africa, it is not something that was not incorporated into our day-to-day lifestyles. The challenge in respect of the subject is the tools and the enabling environment to have the concept properly utilized and put to good use. The poor address system in most of our countries in this part of the world, as well as the absence of a centralized automated data center (database/MIS) that can be accessed by the click of a button or logging unto a website, corruption (Someone enriching himself by holding on to new and accurate data) and the credibility of data, the mysticism associated with some socio-religious information, are but a few challenges that mitigate effective due diligence in the sub region.

You may want to conduct the Due Diligence anyway, and in fact you will be successful in doing so, but the cost, time and frustrations associated with doing it will make you want to take the risk without it, than to incur so much cost and stressed out to have it done.

The fast growing investments in the area of banking and finance especially in Ghana coupled with the inability to conduct proper Due Diligence exposes the industry to risk in money laundering and other related organized crimes which invariably mitigate best practices in compliance in the financial industry. The way forward in the midst of these challenges is to have a Due Diligence minds set for policy makers and all other applicable stakeholders in our day to day dealings and business. This, you will agree with me will help foster the application of the concept not in its totality, but great progress would be made.

JAMES KPAKPOE ACQUAYE
HEAD, AML DEPARTMENT
FCP BANK GHANA.

Very well said. It is as important do conduct one’s Due Diligence for the future of ones domestic life as it is for one’s professional and economic life. James is also the Regional Representative for the IDDO in West Africa.

 L. Burke Files, President IDDO

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