Parliament Thursday approved the issuance of a Sovereign Guarantee of up to GH?2 billion in favour of Ghana Amalgamated Trust (GAT) Limited.
GAT, a special purpose vehicle (SPV) backed by the government, was incorporated in December 2018 to raise up to GH¢2 billion and invest in five indigenous banks.
The aim is to rescue the five indigenous commercial banks that failed to meet the BoG’s minimum capital requirement of GH¢400 million.
The beneficiary banks are the state-owned ADB Bank and National Investment Bank (NIB). The rest are Universal Merchant Bank (UMB), Prudential Bank and OmniBank, which is merging with Sahel Sahara Bank.
Already, GAT has appointed Mr Albert Essien, formerly of Ecobank and Mr Eric Nana Otoo, formerly of Goldman Sachs, Mckinsey and Duet as its Board Chairman and Managing Director (MD) respectively.
GAT has committed funds from pension funds and other investors, through a bond programme, with proceeds of up to GHS2 billion to be used for equity investment in the eligible indigenous banks, as determined by the investors. The bonds issued to the Pension Funds will be listed on the Ghana Fixed Income Market (GFIM) for liquidity purposes.
Disagreements
The debate on the approval of the GHc2 billion was concluded last Wednesday but the approval was deferred because of a lack of a quorum.
The Majority Leader, Mr Osei Kyei-Mensah-Bonsu, requested for the suspension of the approval for lack of a quorum following the indication by the Minority Leader, Mr Haruna Iddrisu, that the Minority side would not partake in a decision to approve the facility.
The debate on the facility followed the presentation of a report by the Finance Committee, which recommended by majority decision, the approval of the special purpose vehicle (SPV).
During the debate, the Majority and Minority sides disagreed on the objectives of the SPV as well as the commitment of the government to support local banks.The Majority side led by the Minister of Monitoring and Evaluation, Dr Anthony Akoto Osei, argued that the government wanted to save the local banks to ensure the continuous participation of local banks in the country’s banking sector.The Majority legislators said it was crucial for Ghanaians "to begin to take charge of our destiny."They said all the banks were Ghanaian owned with Ghanaians as majority shareholders, which required of the government to support them to meet the minimum capital requirement.But the Minority members led by their leader, Mr Iddrisu argued that they did not believe […]
