President Akufo-Addo has for the first time since news of Ghana’s banking crisis broke revealed why his administration took a tough stance to sanitize the sector.
At an engagement with Ghanaians living in Rwanda on Thursday, the President explained that “Ghana cannot have a situation where dominant banks in the country are all foreign banks because it would be suicidal for the country’s future”.
He further said a single local bank, which was “much stronger” and could complement the role being played by GCB was preferable than seven inefficient poorly managed ones which would make no meaningful impact on the lives of Ghanaians.
President Akufo-Addo said the ongoing rationalization of the banking sector by the Bank of Ghana (BoG) is to enable the country emerge with the strongest set of indigenous banks to help grow Ghana’s economy.
According to the President, “This process is being undertaken so that at the end of the process, even if they are few, and they are strong, we know that they can compete successfully with the foreign owned banks; it is very important for me.”
The President debunked the assertions by some that ongoing rationalization is meant to eliminate the indigenous banking sector from the country’s banking system, stressing “that’s very dangerous; it won’t make sense to do that at all.”
“The Central Bank supported seven indigenous banks to the tune of GH¢8 billion and it’s a short, medium or long-term solution that we cannot support, especially as these banks had proven themselves to be inefficient and poorly managed”.
Thus, the new state-owned bank, i.e. the Consolidated Bank of Ghana, the President said, is going to be a much stronger indigenous bank, alongside GCB Bank and therefore provide leadership in the indigenous banking sector that is required.
“We cannot have, and that is the clear intention of government, a situation where the dominant banks in our country are foreign banks. It is very dangerous to our future if we allow that to happen,” he said, adding “we are trying to make sure that the banking sector of our country has strong indigenous banks which can compete with these foreign-owned banks.”
President Akufo-Addo recounted the process that took place in Nigeria, where as a result of rationalization of the banking system, the country that hitherto had 84 indigenous banks ended up with about 13 or 14 banks.
The President disclosed that the oath of office he took was effectively to defend the interests of the people of Ghana despite the fact that he would step on the toes of persons with vested interests or established ways of doing things.
“My assessment is what should guide what I do. It shouldn’t be about if I don’t do this, if I do this I will lose a vote here, or a vote there. Well I am a politician, I want the vote, no two ways about that, but I think that I am required, first of all, to do what I consider right for our people, than worry myself about the impact of it on my own political support.
“It’s the same reasoning that inspired me over the ‘galamsey’ phenomenon,” President Akufo-Addo added.
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