Former President John Dramani Mahama has stated that the next National Democratic Congress (NDC) administration will restore the licences of banks whose authorizations were “unjustly” revoked as part of the government’s financial sector reforms.
This, he claims, is one of the rafts of measures aimed at revitalizing the banking industry and boosting financial confidence.
“We will restore indigenous investment and the banking and investment sector. We will create a tiered banking system that will serve the various segments of the market. We will give an opportunity for experienced banking hands who were laid off to secure their careers once more and move away from the menial jobs that they were forced into. As far as practicable, the banking licenses that were unjustly cancelled by this government will be restored”.
Finance Minister, Ken Ofori-Atta supervised the banking sector clean-up from mid-2017 to January 2020. The clean-up saw a reduction in the number of banks from 34 to 23, whilst 347 microfinance institutions, 15 savings and loans and eight finance houses had their licences revoked.
During his acceptance speech following his victory in the recently ended NDC parliamentary primaries, the flagbearer of the opposition NDC also stated that he will ensure the re-employment of staff whose appointments were terminated during the banking sector clean-up.
He also stated there that he will advocate for improvements at the Bank of Ghana due to the regulator’s weak oversight of the sector and the suffering caused by the government’s domestic debt restructuring.
“We will rejuvenate the almost collapsed banks. This will involve sweeping reforms at the Bank of Ghana. Because the Central Bank itself is a part of creating this problem. I will create the foundation that will ensure that, Ghana will not suffer such a deadly debt management program that almost our elderly people holding government bonds to an early grave and wipe out the investments of the Ghanaian middle class.”
A number of the institutions that had the licences revoked were found to have varying degrees of corporate governance lapses. The total estimated cost of the state’s fiscal intervention, excluding interest payments, from 2017 to 2019 was pegged at GH¢16.4 billion.
The government in 2020 claimed that it spent about GH¢21 billion on the banking clean-up exercise.