Financial sector cleanup: Well-handled and in a stronger position- Prez. Akufo-Addo

President Akufo-Addo has disclosed that he is undaunted by criticism of his handling of the banking sector crisis which led to the collapse of some financial institutions and savings and loans companies in the country.

The collapse of the banks resulted in the loss of over GHC 20 billion. That notwithstanding, the president indicated that, but for the timely intervention of his government, the banking system would have collapsed.

He, however, expressed his displeasure over the connivance of the perpetrators who orchestrated the collapse of the banks in criticizing him.

 “It became obvious to us when coming into office that if the analysis that had been made about the fragility of the financial sector that we had inherited… God knows what would have happened to our country and the manner in which the reforms had been carried out, I know there is a lot of controversy.

“There are many of the people who are responsible for the crisis in the first place and have had it convenient to be able to point accusing fingers… but that is the way of things. Those things never bother me too much because I understand the need for politicians to agitate. But I think that it’s a matter that has been very well handled. It has enabled the country to come out of the financial sector mess that we inherited in a stronger position and all the indices are pointing to that”.

Commenting on the efforts by the Central Bank, the president commended them for the yeoman’s job, while also requesting them to make public reform strategies for the banking sector.

“So, it’s a major achievement for you and your team, it’s one of the reasons why we wanted very much to come here. There are issues about the reforms that are not so clear to many people. For instance, what particular clear measures have been taken within the bank to make sure that the situation that developed, that created the crisis in the first place… what measure have been put in place? I don’t think there’s sufficient publicity about it. And even, on occasion like this, gives you the opportunity to explain to the Ghanaian people measures that have been put in place to make sure that those events don’t reoccur”.

Speaking at the meeting, the BoG Governor commended the President on his effective role in handling the challenges of the banking sector.

“Your clear leadership and understanding of the role of the financial sector in the government’s transformation agenda, gave the leadership of the Bank the confidence and courage to embark on the comprehensive banking sector reforms over the last three years, which saw an increase in the minimum capital requirements, clean-up of the financial sector by the revocation of licenses of weak and insolvent institutions, and a revamp of the regulatory framework to stabilize and strengthen the sector”.

The clean-up of the financial sector, he stressed, has resulted in a stable financial sector with fewer banks and Specialized Deposit-Taking Institutions (SDIs) that are well capitalized, liquid, and solvent.

“These efforts helped to earn the Bank international acclaim as the Central Bank of the Year in 2019. By the end of 2019, all the financial sector soundness indicators showed strong improvements as capital adequacy ratio, profitability, and liquidity levels increased significantly while non-performing loans declined, he intimated.