The Vice-President of the Republic, Dr. Mahamudu Bawumia, has responded to claims by the former President John Dramani Mahama that the financial sector mess was created by the current government and its clean-up was mishandled by the Bank of Ghana.
Dr. Bawumia gave his response at the launch of the United Nations Office for Project Services (UNOPS) $5 billion initiative to build 100,000 affordable homes in Ghana.
Dr. Bawumia noted that following the financial sector reforms under the Kufuor government, Ghana’s banking sector was strengthened, liquid and recapitalized. Under the NDC government of President Mahama however, Ghanaians watched painfully as gains from these far-reaching reforms implemented under the Kufour-led administration were eroded by years of no regulatory and supervisory oversight, leading to the licensing of institutions with fake capital, poor corporate governance, and impunity as shareholders plundered the deposits of poor depositors.
Dr. Bawumia stated that former President Mahama claims that the problems in the banking sector could have been handled differently, for example through the Non-Performing Assets Recovery Trust (NPART) which was set up under the Financial Sector Adjustment Programme (FINSAP) in 1990 as a vehicle to acquire the non-performing loans of distressed banks demonstrates his limited understanding of this issue. President Mahama, he argued, forgets that almost all the NPLs transferred to NPART in the 1990s were from 5 or so state-owned banks, with NPLs from the only three private banks constituting a mere 4%. Also, he does not mention that the same NDC government deemed it wise to close banks after the NPART had shown that it was not a panacea for dealing with banking sector crisis, hence the liquidation in Ghana of BCCI in 1999, and in 2000 the closure and liquidation by the Bank of Ghana of the Co-operative Bank and Bank for Housing and Construction, incidentally at a time when Mr. John Mahama was Minister of Communications and had to explain the reasons why those banks could not be saved by the then Government.
“ Today, does he not know that keeping “dead” financial institutions alive by public funds under the pretext of “too big to fail” destroy the financial system and the economy as a whole? Actually, many of the financial institutions which had their licenses revoked could not even pay customers their deposits of as little as GHC300."
"The Bank of Ghana under its current leadership has shown courage by taking the “bulls by the horns” and dealing decisively with the problems created under the Government of John Mahama, to avert the collapse of the entire financial system"
"The Government’s financial interventions in the cleanup exercise were necessary to help mitigate the socio-economic impacts of the failure of the relevant financial institutions. The Government’s actions have restored confidence in the banking system as customers of the defunct deposit-taking institutions continue to access their funds without difficulty. Through the Government’s interventions, deposits held by some 4,629,029 depositors have been saved, as well as over 3,000 jobs saved" Dr. Bawumia added.
"But where from John Mahama’s newfound care for indigenous firms? Does John Mahama know how many indigenous firms collapsed under 4 years of dumsor? Why didn’t his government bail them out? Why this sudden love for collapsing indigenous firms? Where were the specific policies to support them? Does he know how many jobs were lost? What did he do about that if he cared so much about jobs?" he questioned.
Dr. Bawumia also stated that “We would all like to see the survival and growth of indigenous banks but we don’t want to have financial institutions that threaten the stability of the entire financial system whether they are indigenous or foreign. We would rather have a few well-capitalized, liquid and sound banks than many weak, undercapitalized and illiquid banks that cannot effectively function as banks”.
"This problem was obvious in 2014 and before. It is a problem President Mahama and his government should have thought about. Even in opposition, we pointed out on the basis of available information that at least 8 banks were likely to collapse. Yet nothing was done. When matters came to a head in 2017, the Bank of Ghana took a decisive step to resolve the situation. But today, the response of President Mahama is that he is going to set up a committee to tell him what to do. When you are faced with a real crisis, you take firm decisions. You don’t dilly dally and play to the gallery after the fact" Vice President Bawumia concluded.
Source: Peacefmonline.com
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You are here just replying messages because of your self interest. i am sure they have paid you. NPP never again. me and my family. we will campaign and vote against npp come what may. AAAh why. you came to collapse businesses?? Sha.me!
It is said that if you don't know your history you'd not move in the right direction. Just ask yourself how did we get here? I am very happy you are a banker so as a banker, is it prudent for depositors funds to be plundered by shareholders and still expect the banks to survive? And you say this issue should not be attended to? Well the era of impunity is over so look for the real cause of the banking troubles.....and if you don't know, it started from when Dr. Kofi Wampah took over through to the last governor before Addison took over. Let's have the boldness to deal with issues so that it doesn't not occur again.
A real foooollllll is one who either doesn't know something but claims to know or one who knows but pretends not to have any knowledge of a matter so where do you belong? You have been blinded by politics to the extent in the abundance of knowledge you still remain ***barred word***.
Listen. Bawumia, keep quiet. keep quiet. NPP serial writers and commentators keep quiet. you always refer to the past. think about it now. You have caused pain to us the banking staff and you are saying what?? Propaganda will not work at this time. I think Mahama is better than your government a million times. He faced the challenges but managed it. You Bawumia and Your sakora oluu have collapsed the banks due to your selfish interest. you said what?? I have voted for NPP three times on a roll, but mind you I will now vote for NDC. L.I.ARS in sheep skin. NPP, never again
JOHN MAHAMA A NO-SHAME MAN
John Mahama the bloody 1air, it's only ndc mediocre supporters that will believes in such a 1ies from a Desperate and Incompetent Loser JDM.
No wonder you are a support of the TIO and a member of NDCieve Party. Nana Peter you seem to be leaving in another part of the planet and not in GH.,
Bawumia is a liar as well as nana Addo and NPP. THEY HAVE CAUSED LOST OF JOBS and sacked other ghanaian workers and brought in thier relatives. they have not put up a single infrustructure nor created any new job as the used to ties to the good people of Ghana. please lets vote NANA ADDO and NPP OUT and bring in JM to continue with his good work.
Tell that desperate incompetent Mahama the mess he caused before leaving office
In 2007 and 2008 America was in economic meltdown. LAYMAN BROTHERS, CITI BANK Obama came with solutions Merchant Bank gave loans to Ibrahim Mahama, Appiah Minka etc on 2007 and 2008 before Mahama became President.When Merchant bank and Trust bank were having crisis, Mills and Mahama never complained. we have seen quality of solutions provided to salvage Merchant and Trust Bank without any Ghanaian losing their jobs. If you have a low,shallow thinking and empty loud ,know it all Vice president who is adverse to advise. This is the kind of response he will always expouse. You have Bawuliar who thinks he is the citadel of knowledge. You professionally and systematically collapsed Formal Ghanaian Banks. You clandestinely you raised minimum capital requirements by over 300% against appeal and objections from local and other foreign banks(Bank Of Barora). YOU withhold contractors legitimate claims financed by local bank, GN Bank. How do you expert Ghanaian banks to flourish. You foreign investors will respond favourably to your call to come to invest in Ghana when you have the penchant to destroy your citizens business. The telecom sector , oil sector,banking, mining sector are all in the hands of the foreigners. Ghana beyond aid is not just a populist talk. May I know whether the dumb and ***barred word*** vice president is aware of Talent DISCOVERIES, PDS ***barred word*** and Duuuubbbious deals,Rot at TOR. Did the "angel reader" read 2017 and 2018 PROCUREMENT reports showing how fantastically how his Business Talent(nyansa nkronu) DISCOVERIES Ltd.Bawumia and the so called Banking consultants should operate Susu collection businesses for a year in Ghana and know its painful to sacrifice your business on the alter of politics. REGULATORS are there to guide,reform.You closed down radio stations, banks,microfinance, small scale mining, construction sector,fishing,private Secondary. With huge presence of foreign interest in your critical sectors of your economy, how can you currency be stable. A well thought out decision by any well experienced, refined manager,will protec jobs,reserved these strategic industry for the national because long term implications. Bawuliar as a short sighted can afford to speak and kill indigenous businesses.