Presidency takes GHC15.6 billion from state coffers with executive powers

President Akufo-Addo, has granted executive approval for the expenditure of GHC15.6 billion to save the funds of depositors of the various financial institutions that have collapsed, as well as shore up the liquidity of the financial sector in a manner suggesting total disrespect to parliament.

There are reports that, the Finance Minister, Ken Ofori-Atta, had last week failed to secure approval from the finance committee of parliament for the amount to be sanctioned for the banking sector clean-up.

A meeting convened on Thursday, December 5 by the finance committee with officials of the ministry regarding the request, ended inconclusively.

The Finance Ministry, failed to provide information sought by the ranking member for the Committee, Cassiel Ato Forson, in order to assist the Committee make a determination regarding the appropriateness of the request.

In a letter to the chairman of the finance committee, Dr Mark Assibey-Yeboah, copied leadership of parliament, Mr Ato Forson, requested for documentation on the absorption of UT and Capital Banks by GCB Bank, following revocation of their licenses in 2017, the seven banks which were collapsed into the Consolidated Banks among others.

But a letter addressed to the Minister of Finance by the President’s Executive Secretary, Nana Asante Bediatuo, said: “The President, has granted executive approval for an expenditure of up to fifteen billion six hundred million Ghana cedis (GHC15,600,00,00.00) toward protecting depositors and investors of failed financial institutions and to improve liquidity of the financial sector”.

In the past two years, the Bank of Ghana’s reforms, has led to the collapsed of nine local banks, 347 microfinance institutions and some 23 finance houses.

The collapse of the nine local banks, birthed the state-owned Consolidated Bank Ghana (CBG) Limited.

Heritage Bank Limited (HBL) was one of the last two collapsed banks to have been added to CBG, which was first formed when the central bank, collapsed some five banks in August 2018.

On August 1, 2018, the BoG, announced the consolidation of the failed local banks.

They included the Royal Bank, The Beige Bank, The Construction Bank, Sovereign Bank and uniBank.

Later on, HBL and Premium Bank, were added to the first five.

The BoG on August 14, 2017, approved the takeover of UT Bank and Capital Bank, by the state-owned GCB Bank Limited.

Also, the Securities and Exchange Commission (SEC), recently revoked the licences of 53 fund management companies.

The finance committee of parliament, had considered the additional amount, captured in a memorandum to the House from Mr Ofori-Atta on November 28, 2019, saying it was to be used to “protect depositors of failed financial institutions and improve liquidity of the financial sector”.

According to the Ajumako Enyan Esiam lawmaker, Ato Forson, the information “will assist us carry out appropriate due diligence in the performance of our oversight duties as members of parliament and to establish the need to commit public funds of fifteen billion six hundred million cedis”.

Officials of the finance ministry, who were present at the meeting, however, failed to provide documentation as demanded.

The development compelled chairman for the committee to end the meeting without any agreement regarding approval of the over 15 billion cedis for the banking sector clean-up exercise.

The amount of money the government is seeking, if approved will bring the total amount to be used for the exercise to over 29 billion cedis according to analysts.