Ken Ofori-Atta speaking at the event while Dr Osei-Assibey and Dr Ashley look on
Government says it has so far spent GH¢8 billion to deal with the mess created in the country’s banking sector to ensure the protection of depositors’ funds and jobs.
Minister of Finance, Ken Ofori-Atta, disclosed this yesterday at a public forum organized by the Danquah Institute in partnership with Citi Fm in Accra under the theme: ‘Clean Up: Are Depositors Safe?’
According to Mr Ofori-Atta, government’s intervention was to forestall the loss of about 50,000 jobs and allay fears of the general public about their deposits.
He said without the clean-up exercise, government’s goal of turning Ghana into a financial service hub in the sub-region would not have materialized.
Legal Battle
The Bank of Ghana (BoG) recently revoked the licences of five local banks and merged them into what is now called Consolidated Bank Ghana Limited.
The five affected banks namely Sovereign Bank, Royal Bank, The Beige Bank, Construction Bank and uniBank, were reported to have been severely insolvent, with some allegedly acquiring their operating licences through suspicious means.
UT Bank and Capital Bank were earlier taken over by the Ghana Commercial Bank in August 2017 for insolvency problems as well.
However, former Finance Minister and shareholder of uniBank Ghana Limited, Dr. Kwabena Duffour, has sued the Central Bank in a bid to reclaim the defunct bank whose licence was revoked on August 1, 2018.
Dr. Duffour, through his lawyer, Prof. Raymond A. Atuguba, has filed a suit against BoG at the High Court in Accra to order the Central Bank to return his bank.
Weak leadership
But two senior economists, Dr Ebenezer Ashley and Dr. Eric Osei-Assibey, a Senior Research Fellow at the Institute of Economic Affairs (IEA), as well as two renowned lawyers namely, lawyer Ace Ankomah and lawyer Clara Kasser-Tee, are of the opinion that Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, had taken the best decision by cracking the whip in the banking sector.
They pointed out that the decision was long overdue.
According to the lawyers and economists who contributed to a panel discussion at the forum, the current mess could have been avoided if the previous leadership of the Central Bank under the National Democratic Congress (NDC) administration had done a good job.
Dr Ashley urged Ghanaians not to blame the current Governor of the Central Bank, who is only trying to take the bull by the horn.
Dr Osei-Assibey observed that the economic challenges that faced the country from 2012 to 2016 under the Mahama/Mills administration were clear signs that the banking sector was going to face crisis.
Robbery
“If the Bank of Ghana was doing its work well, we shouldn’t arrive where we arrived,” lawyer Ankomah.
He said directors and shareholders of the seven collapsed banks who are found culpable should be jailed.
He believes ‘robbery’ has taken place in the country’s banking sector, saying emphatically that “the best way to rob a bank now is not wear a mask and hold a gun but to set up a bank.”
It emerged at the forum that the recommendations to dissolve the respective banks were made in 2015 at a time BoG under the governorship of Dr. Henry Wampah was busy buying GHC2 million worth of gold watches for about 72 retiring staff, even though the financial sector, which it was supervising, was in complete mess.
By Melvin Tarlue