The “irresponsible” decisions taken by the Akufo-Addo government in relation to the banking sector are what “aggravated” the banking sector crisis which led to the collapse of nine local banks and loss of jobs, a former Deputy Finance Minister in the Mahama administration, Fifi Kwetey has said.
The licences of nine local banks were revoked within two years under the Akufo-Addo government as part of a financial clean-up exercise. Also, 347 microfinance companies, 23 savings & loans firms and finance houses, as well as 53 fund managers, had their licences revoked by the central bank and the Securities and Exchange Commission (SEC), respectively.
At a town hall meeting on Tuesday, February 11, 2020, Vice-President Dr Mahamudu Bawumia blamed the crisis on the Mahama administration, saying: “Indeed, the current central bank leadership inherited what was pretty much like a body with a cancer in the toe”, explaining that the Akufo-Addo government’s intervention to clean up the sector was timely to avert the worst.
“If you don’t give up that toe in time to end the rot, you’ll soon move from one with a rotten toe to one without a leg because the rot will eventually spread to your hip and then you are going to have to lose the entire leg”, Dr Bawumia illustrated.
The Vice-President said: “The swift and decisive action taken by the new management team at the Bank of Ghana provided relief for the financial system as a whole through the funds provided by the government for deposit payouts. Ladies and gentlemen, let us remember that the failures of these financial institutions which we witnessed were a direct result of a system of poor licensing, nonexistent capital, weak corporate governance, related party transactions and so on and this has actually hurt so many people – depositors and employees alike”.
In his view, “The NDC government and the previous management of the Bank of Ghana had ample time to address the impending failures; they were aware of the problems in 2015, in the case of banks, and as far back as 2012 in the case of savings & loans and microfinance companies”.
Responding to the Vice-President’s assertions on Class91.3FM’s 505 news programme on the same day, Mr Kwetey said the Akufo-Addo government is being too noisy about its intervention in the sector, noting that the Mahama administration met an even dire situation but handled it tactfully.
“When we took office in 2009, we had a […]