Government rubbishes suggestions it deliberately collapsed financial institutions

The government has rubbished suggestions that some of the financial institutions were deliberately collapsed by the state.

The Bank of Ghana on Friday announced the revocation of licenses of 15 insolvent savings and loans companies and eight finance houses.

But the move has been criticised.

Speaking at a news conference in Accra, the Information Minister, Kojo Oppong Nkrumah, said such arguments against the revocation of licenses are incoherent.

He reminded that the government placed a premium on job creation.

“This is an administration that is promising jobs and incomes for people. Why would such an administration be interested in deliberately closing down people’s businesses when it knows that in the end, it will have to answer for how many jobs that have been created or the net addition of jobs? It is not a coherent argument.”

The minister also said sanitising the banking sector was a priority and that the “government will continue to provide funding to the Bank of Ghana to take action in that space.”

“This is how to resolve these matters. This is how-to protect the deposits of over one million Ghanaians and over Ghc 12 billion that has gone in there.”

Mr Oppong Nkrumah also acknowledged the potential job losses in the sector.

The Ghana Association of Savings and Loans Companies (GHASALC) estimates that some 2,000 employees of the 15 Savings and Loans Companies whose licenses were revoked by the Bank of Ghana will lose their jobs.

Despite the expected losses, the minister assured that the government will continue with efforts towards job creation.

“For us, our answer as an administration is to ensure that we have a lot more growth and expansion in the broader Ghanaian economy so that all classes of persons who are unemployed will get jobs in the various aspects of the economy as it opens up.”

Previous action from the BoG to sanitise the banking, specialised deposit-taking institutions (SDI) and non-bank financial institutions (NBFI) sectors saw the licences of nine universal banks, 347 micro-finance companies, 39 microcredit companies or money lenders and two non-bank financial institutions revoked.