Editorial by Ghanaian Times: Ensure swift release, disbursement of banking sector clean-up bailout

It is good news that a total of GH¢700 million is to be released to the Securities and Exchange Commission (SEC) for disbursement to some fund management companies (FMCs) to pay individuals whose funds were locked up as a result of the financial sector clean-up exercise embarked on by the government.

The country’s banking sector clean-up exercise was embarked upon in August 2017 by the Akufo-Addo administration some seven months into its second term, which began on January 7 of that year.

Even though the clean-up is touted as having created a more sustainable industry because the regulatory crackdown on poor business practices and weak capital positions in the country’s banking sector has brought about a series of market exits ever since.

In other words, as a result of the clean-up, the weak players in the industry have left it such that their worse impacts on customers in particular have been curtailed or avoided.

But be it as the situation is now being praised, customers of the affected FMCs see the clean-up exercise differently because some of them have parts of their investments still locked up in the systems.

Some of these customers who have no “hills from whence their help would come” have suffered untold hardships.

It can hardly be ruled out that a number of them have even passed on because of the financial stress they were suffering.

There are cases of others, especially pensioners, whose in­vestments were meant to see their young children through schooling but the situation has scuttled that dream.

Those who had planned to build capital to run businesses have also been forced to shelve that dream.

What about investments meant for travel for greener pastures?

Only those who had destiny helpers can boast good lives, but that doesn’t mean they have forgotten about their locked-up investments.

This is why the Ghanaian Times is describing it as good news the GH¢700 million to be released to the SEC for disbursement to some FMCs to pay individuals whose funds were locked up as a result of the financial sector clean-up exercise.

The money is said to be the first tranche of an additional GH¢ 1.5 billion to be released by the gov­ernment to bail out the remaining asset management companies.

It is exactly seven years now since the clean-up was embarked upon by the government and what it means is that the value of the locked-up investments has fallen drastically in the face of the depreciation of the local currency over the seven-year period.

Even if the locked up moneys is accruing interests, it is not wrong to say that the interest plus the principal together cannot accomplish what just the prin­cipal could do at the time of its investment.

Therefore, the Ghanaian Times appeals that the bureaucracy involved in releasing and disburse­ment the GH¢700 million should be toned down to reduce the financial stress being suffered by the affected customers.

Besides, it should not take too long for the government to release the remaining GH¢800 million of the GH¢1.5 billion earmarked for the bailout.

Despite the good things that can be said about the banking sector clean-up embarked upon in 2017, the fact is that its flipside has affected some people and it is good the govt is aware of this and doing its best to ameliorate the people’s suffering but this must be done swiftly.