Minority in Parliament has emphasized the need for the government to restructure the balance sheet of the National Investment Bank (NIB).

According to the minority, government’s intention of merging the National Investment Bank (NIB) with the Agricultural Development Bank (ADB) is not the best.

Addressing journalists today, September 28, 2023, ranking member for Finance Committee of Parliament, Isaac Adongo, revealed that the plan by government is a smokescreen to sell off the two banks after their merger to government officials.

“It is clear that this is not about the interest of NIB. This is the last step towards passing through the back door to acquire NIB and ADB for themselves in a state capture… Government should just restructure the balance sheet of NIB to swap all the NIB debt that it owes to government and give government equity.”
Isaac Adongo

Justifying its stance, the minority maintained that although government insists it doesn’t have money to capitalize the bank, it has already given GHC500 million and GHC800 million debt to NIB, totaling some GHC1.3 billion.

In light of this, it requested government to pay the debt owed to the bank and further proscribed measures that will make it viable.

“It is your money. You owe the bank. The money is already sitting there. Commit to saying that this is my contribution towards capitalization so that we issue shares to you and move the money to equity.”
Isaac Adongo

Implications of merger between NIB and ADB

Furthermore, Mr Adongo noted that the move by government, owing to the imminent collapse and subsequent acquisition by ADB, will lead to the loss of a considerable number of jobs.

He explained that as it stands, contractors NIB engaged to work on government projects are yet to be paid by the Finance Ministry.

“As a result of that, NIB has incurred GHC1 billion on its load books, resulting from Ken Ofori-Atta’s refusal to pay. Now you say NIB is weak.”
Isaac Adongo

Moreover, Mr Adongo questioned the government’s decision to consider the liquidation of NIB, implying that there might be hidden motives behind their move.

He requested that the government seeks assistance from the minority, which is willing to provide a team of experts to work independently and without interference to revitalize NIB.

“How on earth can you kill such a bank, ladies and gentlemen unless there is an ulterior motive, they should come to the Minority, we will give them a group of people to work for free, with a clear mandate, no interference and NIB will be the most viable bank, the most well-capitalized bank and the most liquid bank. It is clear that is not about the interest of NIB.”
Isaac Adongo

Prior to this, some experts reckoned that the proposed merger of the NIB and ADB is a bad move by government.

Finance lecturer at the University for Professional Studies (UPSA), Dr Jabir Mohammed, revealed that ADB bank may not having the financial capacity to take over the National Investment Bank (NIB), following government’s consideration of the move.

According to him, there is the need to find out whether the ADB has the key balance sheet and right profit margins to be able to takeover NIB. He equally stated that with ADB having so many branches across the country, he wonders whether it will be prudent to take on NIB as an addition.

Furthermore, Dr Mohammed stated that if ADB is doing very well and it requires additional assistance to do so, then it may be feasible. However, he expressed concern over the struggling nature of the bank following the banking crisis period, where most banks were supported by the Ghana Amalgamated Trust Fund.