Pay depositors of defunct financial bodies in cash and not bonds – Ato Forson tells govt

Former Deputy Finance Minister, Cassiel Ato Forson, is charging government to pay cash to investors who lost their funds to defunct financial institutions rather than bonds.

His comment comes on the back of the Ministry of Finance and the BoG saying payment will be a “combination of cash and bonds” and would first benefit customers whose claims had already been validated by the receiver and official liquidator.

Addressing the press, Deputy Finance Minister under the John Mahama-led administration stressed the need for government to make available cash deposits to investors and not bonds.

He argued that funds paid to depositors will lose their value at the end of the payment period due to inflation.

“The fixed deposits for CBG will be paid in ten equal installments over 5 years beginning from March 2021. My concern is that, if one has his or her money in a bank in excess of millions of cedis and no matter the amount, they are going to give you a bond, a government paper.

And that paper they will give you will yield no interest for 5 years. And every year, they will pay you 20 percent for 5 years. That is unfortunate. Because that money will actually lose value in the face of inflation. We will hold the presidency and stakeholders accountable to make sure that cash rather than bonds are used to settle investors”.

Ato Forson further raised concerns on the likelihood of another administration bearing the financial mess the current administration has created.

“Five years, also eats into another government’s administration, you create a mess and you expect someone else to come and fix it.”

Akufo-Addo on full refund of investors lost funds

The decision to pay the full amounts of depositor funds locked up in the collapsed institutions was first announced by President Nana Addo Dankwa Akufo-Addo in this year’s State of the Nation Address last week.

In the statement to Parliament, the President gave an assurance that all depositors of S&LCs and microfinance institutions, including DKM which collapsed in 2015, would receive 100 per cent of their deposits once the validation exercise was concluded.