Former President John Dramani Mahama has unloaded on the governing the New Patriotic Party (NPP) government, accusing them of intentionally causing the collapse of 11 Ghanaian banks during their eight years in power.
Speaking at a meeting with Islamic leaders at the Great Hall of the Kwame Nkrumah University of Science and Technology (KNUST) in the Ashanti Region, Mahama lamented the state of Ghana’s banking sector, which he claimed has been severely harmed under the current administration.
Mahama pointed out that many businesses in Ghana, particularly in the banking sector, have suffered due to the country’s economic hardships. However, he argued that the collapse of these banks was not a result of economic factors alone, but was rather a deliberate act by the NPP government. The banks in question included both local and international institutions that had long served the financial needs of ordinary Ghanaians.
“These were banks that were built with the hard-earned savings of Ghanaians. They were institutions that supported small and medium-sized enterprises (SMEs), which are the backbone of our economy. These banks found themselves in challenging situations due to the lack of support from the NPP government,” Mahama said.
The former president revealed that during his administration, the National Democratic Congress (NDC) had plans in place to support and strengthen these banks, but those efforts were cut short after the party lost the 2016 elections. Once the NPP assumed power, Mahama said, it was their responsibility to provide the necessary backing to prevent the collapse of these critical financial institutions.
Instead, Mahama claimed that the NPP’s failure to offer support led to the downfall of 11 banks, resulting in the loss of thousands of jobs.
“Over 10,000 people lost their livelihoods when these banks were shut down,” he added. Many of the affected workers, including cashiers and other bank employees, have since been forced to find alternative sources of income, with some reportedly turning to ride-hailing services and other informal jobs.
The banking sector clean up
The banking sector cleanup was a series of regulatory reforms and recapitalization measures that began in mid-2017 and ended in late 2018.
The goal of the cleanup was to make the banking system more resilient and to support economic growth.
Some of the actions taken during the cleanup included the closure of banks. In August 2017, the Bank of Ghana (BoG) closed two banks and appointed PwC as the receiver to liquidate them.
The BoG also appointed KPMG as the administrator of uniBank in March 2018 to protect depositors and prevent the bank from collapsing.
Furthermore, the BoG increased the minimum capital requirement for banks to GHS400 million.
In April 2018, the BoG published the Corporate Governance Directive to promote stronger corporate governance and risk management practices.
The cleanup resulted in a smaller but more sustainable banking industry. The government spent GH¢21 billion on the cleanup.
By: Shadrack Odame Agyare | Metrotvonline.com | Ghana
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