President Nana Addo Dankwa Akufo-Addo
A member of the 2020 Campaign Communications Team of the NPP, Nana Akomea, has said that but for the sensitive and caring nature of President Nana Addo Dankwa Akufo-Addo, some 4.6 million Ghanaians would have lost their deposits, as a result of the mess created in the financial system by the previous Mahama government.
He said the President showed decisive leadership by cutting the rot that had engulfed Ghana’s financial system, adding that even though the financial sector crisis was caused under the Mahama administration, the former President did nothing to alleviate the plight of depositors.
Speaking at press conference in Accra yesterday, Nana Akomea said Mr Mahama, after supervising a weak financial sector that led to depositors losing their money, rather “blamed them for their bad investment decisions and indicated that government was in no position to address their predicament.”
“In fact, Mr Asiedu Nketia, the General Secretary of the NDC, is on record to have said, and I quote, ‘How can victims of the DKM microfinance scam demand that taxpayers’ money be used to reimburse them when their bad investment decisions had nothing to do with government?’
“Such was the gross insensitive approach adopted by the NDC government at the height of the financial sector crisis,” he stated.
The mess
Nana Akomea insisted that the mess at the financial sector was caused by the NDC, citing the 2016 Financial Stability Report of the Bank of Ghana which revealed that bad loans on the books of commercial banks in the country increased by 14.9 per cent to GH¢4.52 billion in 2015 against the GH¢2.72 billion recorded in 2014.
He noted that the economic and financial data from the central bank showed that Non Performing Loans (NPLs) rose sharply from 11.2 per cent in May 2015 to 19.3 per cent in May 2016, adding “the Central Bank under the erstwhile Mahama administration admitted in 2015 that the spate of non-performing loans on the books of banks was one of the major challenges faced by the banking sector.”
Nana Akomea recounted how NPP’s then running mate, Dr Bawumia, had warned in 2016 that eight banks risked collapse due to the increasing bad loans on their books.
Mr Mahama, in his State of the Nation Address in 2016 stated: “Mr Speaker, over the past five years, there has been a proliferation of microfinance companies. These companies come under the direct supervision of the Bank of Ghana. Unfortunately, lack of effective supervision has resulted in many cases in which microfinance companies licensed by Bank of Ghana have breached the rules and created supposed pyramid schemes that have eventually come crashing down”.
“Actually, in those last five years President Mahama mentioned, 82 microfinance companies had collapsed without a pesewa being paid to the unfortunate depositors,” Nana Akomea stated.
He added: “The NDC’s intervention to provide liquidity support to banks which were on the verge of collapse without effective supervision was catastrophic, to say the least. Monies allocated to safeguard depositors’ funds were insensitively misappropriated by heads of banking institutions with government making no effort to demand accountability.”
Decisive, empathetic Akufo-Addo
He noted that President Akufo-Addo, working with new leadership at the central bank, showed decisive leadership by taking bold and pragmatic steps in merging five big troubled banks to form the Consolidated Bank and capitalized it with a sum of GH¢450 million.
He noted that “the interventions that have since addressed the banking sector crisis clearly demonstrate that bad leadership was the major problem of the erstwhile Mahama-led administration.”
He said, initially, for the over four million depositors, 90 per cent of them were paid cash up-front, with the rest given bonds redeemable in five years.
He added, however, that due to the cry of the depositors whose debt were paid in bonds, President Akufo-Addo held consultations with the Bank of Ghana to explore other ways of relieving these depositors.
“The upshot is that, just a week ago, the Bank of Ghana, through prudent financial engineering of amending the nature of the coupons/bonds, has succeeded in monetizing these bonds. By this, an amount of GH¢3.56 billion has been made available by the central bank to pay cash to every depositor affected by the rot,” he said.
“This remains a monumental feat of the NPP and evidences the sensitivity of this government to the plight of Ghanaians. Cognizant of the hardships and liquidity crunch occasioned by the COVID-19 pandemic, this could be described as a prudent approach to ease the already constrained economy, boost economic activity and expedite the return of the economy to normalcy,” he added.
Source: dailystatesman.com.gh/Kwasi Frimpong
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