Ghana National Chamber of Commerce and Industry lauds BoG actions

The Ghana National Chamber of Commerce and Industry (GNCCI) on Tuesday lauded the actions of the Bank of Ghana (BoG) to consolidate five banks into one entity, saying the move will prevent a major crisis in the financial sector.

A statement issued by the Chamber and signed by Mr Mark Badu-Aboagye, Chief Executive Officer and copied to the Ghana News Agency said the Chamber welcomed the steps taken by the BoG to consolidate the five commercial banks whose licenses were revoked-uniBank Ghana Limited, Sovereign Bank Limited, Construction Bank Limited, Beige Bank Limited and The Royal Bank Limited.

“The Chamber applauds the Bank of Ghana for taking such a bold and decisive initiative to prevent what would potentially have been a major crisis in the financial sector of the Ghanaian economy, of which the private sector would have been a major victim.

“Furthermore, the action taken by the Government to provide financial support to ensure the viability of the newly reconstituted consolidated bank and other indigenous banks is also commendable,” it stated.

The Chamber however called on BoG to strengthen its supervisory and regulatory mechanism, adding that, officials from the BoG and the affected banks whose actions and inactions resulted in the dire situation must be investigated and brought to book where necessary.

“Continuous inspection and enforcement by the BoG is critical in ensuring financial stability,” it said.

The GNCCI said the BoG, Government of Ghana, and all stakeholders needed to learn from the current situation and work collectively to guard against the recurrence of such infractions to ensure that the financial sector develops in a sustainable manner with relevance for economic growth and development.

The Chamber said though it encouraged the establishment of indigenous banks to play a major role in the financial sector of the Ghanaian economy, it was important that interested Ghanaian investors in the banking industry team-up their resources, both financial and human capital, to establish strong and profitable banks that could withstand the vagaries of the highly competitive banking industry.

It noted that the initiatives taken were critical and timely in maintaining confidence in the financial sector, and to ensure that private sector credit growth was unimpeded.

“Businesses need credit to expand to be able to create more and better jobs. Owing to constraints faced by SMEs in accessing long-term credit from the capital markets, banks’ financial intermediation becomes essential.

“Any disruption in the banking sector affects the majority of businesses and individuals, who rely on banks for their credit and investment needs,” the statement maintained, adding that, it expected the current restructuring of the banking sector and the financial system to contribute to strengthen the real economy,” the statement said.

The GNCCI called for a concerted effort to ensure that growth in the banking sector was commensurate with growth in the real economy including agriculture and industry, while ensuring that the transmission mechanism via which the financial sector related to the real economy was strengthened.