Bank Bust: Akufo-Addo’s government alone not to blame – Sam George

Ningo Prampram MP, Samuel Nartey George, has said the problems in the banking sector in Ghana leading to the collapse of some banks should not be blamed solely on the current Akufo-Addo administration.

He said it will be unreal and dishonest on his part to suggest that all the problems in the banking sector started in 2017.

Sam George explained on TV3’s New Day on Saturday September 1, that the central bank, the Bank of Ghana, beginning 2014, failed to perform its supervisory role, a situation that has resulted in the problems in the banking sector currently.

He said, in relation to the 1,700 staff of the Consolidated Bank Ghana Limited (CBG) who are about to lose their jobs: “…I am not going to put the blame solely on the shoulders of this government, I am trying to be realist. I always held the view that the Bank of Ghana itself has questions to answer and when I say the Bank of Ghana, I speak about the institution, which spans from the previous NDC administration. Because it will be unreal and dishonest on my part to suggest that all of these problems emerged in 2017. No.

“The Bank of Ghana has questions to answer from as far back as 2014. For me these are Ghanaians who have lost their jobs, they don’t care which party is in government. All they care about is being able to pay for their children’s school fees. These 1,700, some of them have children and school is going to resume, how do they pay their children’s school fees? I have always said that the Bank of Ghana itself is a candidate for consolidation because the same crimes or offences that these banks are guilty of – poor corporate governance structure, the Bank of Ghana is also guilty of.

“Why? The Bank of Ghana took GHS 620million as liquidity support and gave to a bank without doing due diligence to ensure that there were proper corporate governance structures in there. The Bank of Ghana gave another bank GHS 800million. These banks are in this distress because they gave out facilities, depositors’ moneys without ensuring that the loans were properly collateralized.

“You (BoG) are giving liquidity support, what due diligence did you as a bank do to find out that the money will also be protected ? These are the issues that for me, wee should talk about.”

The Bank of Ghana, recently fused uniBank with Sovereign Bank, The Royal Bank, The Beige Bank and The Construction Bank, to form a totally new local bank called Consolidated Bank Ghana (CBG) Limited.

On 20 March 2018, government announced the takeover of uniBank due largely to liquidity challenges.

Announcing the takeover, the Governor of the BoG, Dr Ernest Addison, said uniBank was insolvent.

KPMG was then named as Official Administrator to manage the bank for some months.

The licences of the other banks were also revoked on grounds that some of them used suspicious information in setting up the banks, while others were insolvent.

Before morphing the five banks into CBG, the central bank, in August 2017, revoked the licences of two other local banks, UT Bank and Capital Bank, and were subsequently taken over by GCB Bank after having been declared "irredeemably insolvent" by the Bank of Ghana.

The Government of Ghana is spending in excess of GHS8 billion in rescuing the seven banks.

Finance Minister Ken Ofori-Atta said recently that the actions of the BoG saved over 50,000 jobs.