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Panic Withdrawals Could Collapse Economy - Papa Kwesi Nduom   
 
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17-Sep-2018  
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In the wake of the crisis in the financial services industry and banking sector, a leading Ghanaian entrepreneur, Dr Papa Kwesi  Nduom, has said the rate at which clients are redeeming their investments and making withdrawals, few investment companies and banks could survive what is happening within the sector.

Expressing serious concerns about the rate of panic redemption of investments and withdrawals by clients from the various indigenous banking and financial institutions, Dr Nduom, who is presently in the United States, asked the Bank of Ghana and all the appropriate State regulators in the financial sector to focus more attention on supporting the indigenous financial and banking sectors to overcome the current challenging trends.

In a telephone interview with the Daily Graphic on Sunday, Dr Nduom pointed out that "When your neighbour's house is on fire, you put water by yours."

Reflection

Using his institution. Gold Coast Securities, a fully Ghanaian-owned company which started business in August 1993, as the 4th dealing member of the Ghana's Stock Exchange, as a reflection of what was going on in financial institutions, he said "this year alone the company has paid out over Gh¢1.3 billion of investment funds to its customers, saying "no investment company can survive if even 25 per cent of its customers run to it to redeem their funds invested in productive activities prematurely and at the same time".

He said to preserve and protect all clients’ funds and investments that had been made, Gold Coast Security was controlling the pace of redemptions.

He said the bulk of the funds with Gold Coast were invested in the pre-financing of government's infrastructural projects to the tune of over Gh¢1.5 billion.

He noted with concern that “for the past three years, some of the contractors whose projects have been completed have not received any payments, but fortunately, payments from the government agencies have started to come in though in smaller amounts than expected".

"We believe that government will make good on these receivables. Therefore from now on, we will limit payments to the amounts received from government agencies to be made for matured investments," he added.

He pointed out that as a senior member of the fund management industry, Gold Coast fully embraced the new industry reforms and directives by the regulator and was working to ensure full compliance to eschew market indiscipline and create value for its customers.

He gave an assurance that Gold Coast would continue to work with the discipline to ensure clients' investments were safe and protected and, therefore, encouraged all clients to be comforted and not panic.

Gold Coast

Gold Coast Securities, a fully Ghanaian owned company, started business in August 1993 as the 4th dealing member of the Ghana Stock Exchange.

In 1993, the four were Gold Coast, Databank, SAS and NTHC. Today, the stock exchange has 22 dealing members who are brokers and 148 fund managers. The company which started as Gold Coast Securities is now Gold Coast Holding Company, a full-blown investment banking firm with Pension, Brokerage, Fund Management, Asset Management, Corporate Finance & other specialised divisions.

It operates the Gold Fund Unit Trust, Gold Money Market Fund, provident funds and provides project financing.




 
 
Source: Graphic.com.gh
 
 

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