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Government deliberately killing banks - Isaac Adongo

Isaac Adongo Sona MP for Bolga Central, Isaac Adongo

Thu, 2 Aug 2018 Source:

A leading member of the opposition National Democratic Congress (NDC) is accusing the ruling New Patriotic Party (NPP) of deliberately collapsing financial institutions in the country.

Member of Parliament for Bolgatanga Central, Hon. Isaac Adongo describes as "sickening" government’s refusal to pay debts owed to these banks.

Speaking on Okay FM’s Ade Akye Abia programme, he explained that government should have intervened earlier and not allow the local banks to go into financial distress.

"A classical example is government’s indebtedness to Unibank.

"If government pays it debt owed Unibank, it will over capitalized more than any bank in Ghana," he stated.

According to him, Unibank has in excess of GHc 5.7billion in debts owed it and would not have issued with recapitalization if those monies are paid.

Unibank Insolvent

In March 20, 2018 government announced the takeover of Unibank.

Announcing the takeover, the Governor of the Bank of Ghana Dr. Ernest Addison, said UniBank is currently insolvent.

He also announced the appointment of KPMG to, over a period of six months; manage the bank to save it from collapse.

Gov't Must Pay Its Debt Owed Unibank

However, the new administrator of Unibank is asking government and its allied institutions to pay its debts owed the bank in order to prevent the local bank from total collapse.

A June 22, 2018 letter written and signed by Simon Dornoo on behalf of KPMG, to the Finance Minister said the government must pay the debts at its earliest convenience.

As at May 31, 2018, government and its agencies are said to be indebted to Unibank to the tune of 868,973,599.10.

The debt was incurred over a period spanning both the NDC and NPP government

The administrators say government must pay its debt owed the bank as one of the key measures to bringing the bank back on its feet.

Having taken charge over a period of four months, KPMG has two months left to sanitize the Bank said to be insolvent.

5 Banks Collapse

But with just two months for KPMG to conclude its work, the BoG on Wednesday announced the merger of the bank and four others - Sovereign Bank, Royal Bank, Beige Capital, Construction Bank - into Consolidated Bank Ghana Limited.

The Consolidated Bank Ghana Limited is expected to help the government in economic development.

Dr Addison attributed the decision to merge the bank to liquidity challenges.

But the NDC MP is of the firm belief that the present administration "deliberately plunged the five financial institutions into insolvency", and has potentially "created a new systemic risk to the financial sector."

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