Vice-President Dr. Mahamudu Bawumia and former President John Mahama
Vice-President Dr. Mahamudu Bawumia yesterday took another swipe at former President Mahama with regard to his attempt to cause disaffection with government in the wake of the banking sector clean-up exercise done by the Bank of Ghana recently.
It follows claims by Mr. Mahama on August 22 that the revocation of licences of some insolvent banks and other savings and loans companies by the central bank was not necessary, and that the government had taken a chaotic path in handling the issue.
The former President had said specifically: “Was the revocation the best option at this circumstance or there was no other option? Our central bank chose the chaotic situation with accompanying huge debts, and the government had no clue on how to clear it. Revocation of licences would have been the last resort and not the first resort. No country is immune to crisis in the financial sector.”
Launching the $5 billion affordable housing project being financed by the United Nations Office of Project Services (UNOPS) to be undertaken by Sustainable Housing Solutions (SHS) and their Ghanaian counterparts at Afiaman, near Amasaman, in the Greater Accra Region yesterday, Dr. Bawumia said Mr. Mahama’s tenure was characterised by “outright regulatory failure and cronyism” and that led to the biggest financial crisis ever in Ghana.
He said: “Mr. Mahama chooses, as is characteristic of him, to rewrite history. Perhaps, he also has not caught up with the collective wisdom around the world that bailing out insolvent banks does not cure the canker that soon rears its head again.”
“Is he not aware of the reforms around the world (including outright statutory prohibition of bailouts in some jurisdictions) to ensure that financial institutions that reach the point of no viability are made to exit the financial system in an orderly fashion even before they reach insolvency? Does he not know that keeping ‘dead’ financial institutions alive by public funds under the pretext of ‘too big to fail’ destroys the financial system and the economy as a whole?” he added.
The Vice-President said: “Actually, many of the financial institutions which had their licences revoked could not even pay customers their deposits of as little as GH¢300; has John Mahama not taken the trouble to learn from the experiences of countries all around the world in financial crisis management?”
He added that “obviously not, and hence his admission that he has had to recently set up a Policy Working Group on Finance and Economy that is now studying and analyzing the situation with a view to coming up with pragmatic steps. This shows clearly that the former President does not have anything meaningful to offer Ghanaians.”
“Mr. Mahama and his NDC have nothing useful to offer the Ghanaian people, and should apologize to the good people of Ghana for causing their pains in the first place,” he stressed.
“Former President Mahama, who now would like Ghanaians to believe he knows how to stabilize a banking sector, kept banks in their comatose state until they died instead of allowing the regulator to do its work independently as required by law to administer the prompt interventions that were needed to ensure that the banks recovered,” he said adding “the good people of this country are, however, not as gullible and ignorant as he likes to believe and we do not all have short memories.”
By Charles Takyi-Boadu, Presidential Correspondent