<<Print>>

The President of the Republic, Nana Addo Dankwa Akufo-Addo, has revealed that the rationalisation of the banking sector, undertaken by his Government, has ensured that deposits of one million, one hundred and forty-seven thousand, three hundred and sixty-six (1,147,366) Ghanaians were saved.

Speaking at the inauguration ceremony of the new Standard Chartered Head Office on Wednesday, 3rd October, 2018, President Akufo-Addo added that noted that his administration assumed the reins of office in January 2017, with the country’s banking sector in deep trouble.

According to him, some banks were saddled with high non-performing loans, $2.4 billion energy sector legacy debts, and were also thinly capitalised, and, as such, were unable to underwrite big ticket transactions.

“With time, even more toxic problems emerged, such as systemic widespread abuse, poor, irresponsible governance practices, liquidity challenges, circumvention of banking laws, all with the apparent complicity of some high-ranking officials of the Bank of Ghana,” the President said.

He continued, “There were situations where directors of banks took depositors’ monies, lent those monies to themselves or to their own businesses, and failed to pay back. This led to liquidity challenges and the inability of these banks to pay back when the depositors came calling.”

The President noted that the banks, caught up in these malpractices, became insolvent, and relied on liquidity support from the Bank of Ghana.

What this meant was that, President Akufo-Addo explained, without injection of liquidity from the Bank of Ghana, these were bound to fail and collapse, with depositors losing their entire savings, and all their workers losing their jobs.

The intervention of his Government and the Bank of Ghana, the President said, prevented a banking crisis, with GH¢12.7 billion of public funds, made up of an GH¢8 billion bond issued by the Ministry of Finance, and GH¢4.7 billion of liquidity support from the Bank of Ghana, being injected into the seven banks that failed.

“These measures saved not only the deposits of one million, one hundred and forty-seven thousand, three hundred and sixty-six (1,147,366) Ghanaians and their businesses and the people they employed, but also minimised job losses in the banking sector,” he added.

President Akufo-Addo reiterated that the rationalisation and clean-up of the financial sector were necessary to safeguard the health and strength of the economy.

“I have said it before, and let me reiterate, that those responsible for the sequence of activities that led to the ‘crisis’ will face the full brunt of the law, if they are found to have broken the law, and suffer all the consequences prescribed by law,” the President stressed.