Aug. 28, GNA – Vice President Dr Mahamudu Bawumia on Wednesday criticised
former President John Dramani Mahama for failing to show leadership to resolve
the financial meltdown in the country during his tenure of office.
He noted that
the former President rather kept the banks and other financial houses in their
comatose state till they died, instead of allowing the Regulator (Bank of
Ghana) to perform its work independently as required by the law.
in the banking system was obvious in 2014 and even before. It is a problem that
President Mahama and his government should have already thought about.
“Even when we
were in opposition, we pointed out the basis of an available data that, at
least eight banks are likely to collapse, and yet nothing was done and so when
things came to a head in 2017, the Bank of Ghana took a decisive step to resolve
a situation,”Dr Bawumia explained.
Bawumia said this when he reacted to a statement issued by former President
Mahama on August 22, that he would set up a Policy Working Group with a view of
coming up with a pragmatic solution to the financial crisis.
President made the remarks when he launched 100,000 housing project being
implemented by the United Nations Office of Project Services (UNOPS) and the
Sustainable Housing Solutions Limited at Afiaman in the Ga West Municipality on
explained that if anything has shaken the very foundations of confidence and
trust in the financial system, then it was former President Mahama’s government
that failed to exercise leadership to resolve the financial crisis during his
tenure of office.
President Mahama’s administration did not roll out any specific policies to
rescue those banks and financial houses that were in financial meltdown, saying
that, the former President was now talking about supporting financial institutions
because he wanted votes in the 2020 elections.
He noted that
former President Mahama superintended over four years of power crisis (dumsor),
while many teachers and nurses were unemployed and cancelled nursing and
teacher trainee allowances and returned the nation to “Cash and Carry” system
under the National Health Insurance Scheme.
Bawumia explained that President Akufo-Addo Government’s action to undertake
financial clean-up had restored confidence in the banking system as customers
of defunct deposit-taking institutions continue to access their funds without
government’s interventions, deposits held up by 4.6 million depositors had been
saved, and also saved 3,000 jobs if the banks were allowed to collapse,” he
He said should
the 4.6 million depositors’ funds have been lost; it could have created a
national security threat, which would have threatened the peace and stability
of the nation, saying; “It is better to have a few well-capitalised, liquid and
sound banks than having many under-capitalised and illiquid banks that could
not effectively function as banks”.
Bawumia lauded the current leadership of the Bank of Ghana for showing courage
by taking the bull by the horns and dealing decisively with the problems
created by the erstwhile NDC administration led by President Mahama to avert
the total collapse of the country’s financial system.
government spent GH¢13billion to pay off depositors funds which were
misappropriated by the defunct banks and savings and loans schemes.
up the Consolidated Bank Limited and capitalise it with GH¢450 million to
acquire depositors liabilities of the seven of the nine defunct banks so that
no depositor loses his/her deposit.
Dr Bawumia said
the move had resulted in stronger indigenous banking sector, restored
confidence and trust in the financial sector, adding that, without a sound
financial and banking environment, it would be difficult for workers to buy
affordable homes with mortgage term.
He said that
the NPP administration under President John Agyekum Kufuor instituted reforms
between 2001 and 2008, to create a modern financial sector that was
well-capitalised and liquid, which saw banks chasing workers to go for loans.
gains were painfully eroded by years of unregulated and supervisory oversight
under the Mahama’s administration.
That, he said,
resulted in financial institutions with inadequate capital and poor governance
practices having a field day, while shareholders plunged the funds of
depositors in risky ventures.