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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SEE A GOOD DECISION AND THE EDUCATED ***barred word*** ARE ARE calling for for the INCOMPETENT people who created this problem, just becos they benefitfrom the abuse of the public purse. EDUCATED ***barred word***. NPP all the way.
How long did it take this SO CALLED financial expert to figure it out and what did he do to prevent the banks from collapsing since they took over?
We were in this country when a uniformed policeman mercilessly beat up an innocent poor woman in a banking hall for demanding her own deposit from that financial firm, and she was refused. This unethical, unprofessional and abuse of human right by the policeman and the financial firm occurred under the watch of the workers standing and watching as spectators. In fact, one employee, instead of stopping the policeman from physically assaulting the lady, rather took the child the lady was carrying from her, so that the policeman could beat her the more. So if today, such a firm is closed down for non-performing and the worker has lost his job, meanwhile, a system is put in place for the ordinary poor and innocent Ghanaian to have his or her deposit, what is wrong with it? For me, I think after closing down such non-performing financial institutions, those responsible, as a result of negligence, fraud, incompetence and the rest as well as inactions and omissions of those supervisory bodies, should all be sanctioned or prosecuted to serve as deterrent to avoid future recurrence. As good people who want the best for this country, don't let us behave as hypocrites and stick to good practices at all times. That is one of the best ways to save and develop Mother Ghana. God bless our Homeland Ghana.
How can you collapse a bank and refer to that as a solution to the bank's problem.
npp came in to fix the economy but i bet we have a very week and bad economy now under their watch. greed is taken over and the big man himself is not innocent. smh
you are very good in analyzing things and i think the opposition can use that against the npp gov't. we were sick but did not die. you took over and now we are all dying but the illiterate npp members will not understand . i am done voting for the npp. if npp thinks one vote doesnt count they can ask those in opposition.
mr know all.solve the myriads of problems facing the majority of ghanaians. people wake up
Kwam, you are very wise. Your analogy is a powerful campaign message ndc can incorporate into theirs. Meaning, Ghanaians were sick mahama was in power, but because he was a good doctor he managed to keep Ghanaians alive and vibrants. He retired and a new doctor took over who before taking over claimed he was so competent to ensure Ghanaians never got sick. Now it has turned out that he is rather a killer and a murderer who has murdered so many Ghanaians. Infact since barwumia became a vice president, there has been so much hardship in Ghana more the the so called incompetent amissah Arthur was in charge. Even if banks were in stressful condition, tell me one bank that collapsed under mahama.
If a doctor takes care of patients in hospital and none die when he was in post and the doctor retires and new doctor takes over and all the patients die in his hand,who among them is good doctor? Bawumia it would have been good for this country if you were not born,he is full of joke and never serious about any issue.
When you have a governor who gives liquidity support to failing banks without the proper supervision what do you expect. Mahama sat down unconcerned for depositors monies to be misused by directors and shareholders of banks. Lending to themselves and inter related companies. Tax payers money paaa was being blown left right centre. You now have a competent government who brings an end to this wanton dissipation of depositors money and he is still talking, He knows no shame. We have all seen the bold decisive steps being taken by NPP to bring confidence into the system. One quality which Mahama doesnt have. Long live NPP