Managing Director of the State Transport Company (STC) Nana Akomea has stated that President Nana Addo Dankwa Akufo-Addo demonstrated bold and decisive leadership in cutting the rot that engulfed the banking sector when he assumed power in 2017.
The administration, he said, took pragmatic steps to address the dire situation it inherited and successfully merged the five big troubled banks to form the Consolidated Bank Ghana (CBG) with a capital of GH¢450 million and also paid depositors their monies.
According to him, the empathy-driven approach of the NPP government in dealing with the crisis in the past three-and-half years is in sharp contrast to Mr. John Mahama and the National Democratic Congress’s (NDC) lack of compassion.
At a News conference by the governing New Patriotic Party (NPP) to address the payment of depositors of defunct savings and loans companies, Nana Akomea noted that the NPP-led government should be highly commended for its efforts in ensuring that all depositors of the banks, specialized deposit-taking institutions, and microfinance institutions are fully paid.
Banking sector mess
The former NPP Communications Director stated that the banking sector crisis that the country experienced was caused by the John Mahama-led National Democratic Congress (NDC) government.
According to him, the 2016 Financial Stability Report of the Bank of Ghana, revealed that bad loans on the books of commercial banks in the country increased by 14.9% to GH¢4.52 billion in 2015 against the GH¢2.72 billion recorded in 2014.
“The economic and financial data from the Central Bank showed that Non-Performing Loans (NPLs) rose sharply from 11.2% in May 2015 to 19.3% in May 2016. 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.
“The Central Bank stated categorically that the level of impaired loans in one of the largest commercial banks had quadrupled and the situation was becoming widespread in the banking sector. Due to the non-payment of these loans, the banks had declared GH¢2.4 billion of outstanding debt stock of loans as bad debt,” he added.
MFIs’ collapse under NDC
Nana Akomea pointed out that in the last five years under the Mahama government 82 microfinance companies collapsed without a pesewa being paid to the unfortunate depositors.
The response of the NDC, he said, was to throw the taxpayers’ money to the sinking banks with Capital Bank receiving a total of GH¢620 million, UT Bank a total of GH¢860 million and Uni-Bank GH¢3.1 billion.
“The NDC’s intervention to provide liquidity support to banks that 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.
“Having lost control over the fight to restore sanity in the banking sector, Mr. Mahama and the NDC sat aloof as the problem metamorphosed into a full-blown crisis. A total of 9 universal banks, 23 specialized deposit-taking institutions, and 386 microfinance and credit institutions were on the verge of collapse when the NPP administration assumed power in 2017,” he stated.
President Akufo-Addo, he said, having been deeply touched by the fervent cries of the depositors, held consultations with the Bank of Ghana to explore ways of relieving these depositors.
He noted that for the over 4 million depositors, 90% of them were paid cash up-front, and the rest offered bonds redeemable in 5 years.
He indicated that the Bank of Ghana through prudent financial engineering of amending the nature of the coupons/bonds has succeeded in monetizing these bonds following appeals by the depositors and leading to GH¢3.56 billion being made available to pay cash to every depositor affected by the rot.
This, Nana Akomea argued, remains a monumental feat of the NPP and evidences the sensitivity of this government to the plight of Ghanaians.
According to him, the NDC over the years has proven to be gravely inconsistent especially under the leadership of Mr. Mahama.
“One would expect that as an opposition, they would have drawn lessons from their incompetence in managing the economy and safeguarding the welfare of Ghanaians. Characteristic of the NDC, a myriad of empty promises have been made to hoodwink electorates,” he stated.
The STC Managing Director noted that Ghanaians have seen the light of progress and inclusive development under President Akufo-Addo contrary to the deprivation, stagnation, and selectivity that characterized the Mahama-led government.
Ghana, he said, cannot, therefore, afford to go back to the dark days under Mr. Mahama and so Ghanaians must commit to keeping progress on course by voting for the NPP come December 7, 2020.