The Chronicle Editorial: Banking sector clean-up must affect everyone

President Akufo-Addo has assured Ghanaian citizenry of the arrest and subsequent prosecution of persons directly responsible for the banking sector crises which led to massive losses of jobs.

"We have begun bringing those responsible for the banking crisis to justice," President Akufo-Addo stated while addressing the 71st Annual New Year School and Conference, held at the University of Ghana, Legon, campus.

His comment follows the arrest of the managers and founders of some banks that collapsed in 2017 and 2018 by the Bank of Ghana (BOG).

It would be recalled that in August 2017, 2018 and early 2019, eight indigenous banks had their licences withdrawn over liquidity challenges.

UT and Capital Bank were declared insolvent by the BOG in August 2017, after it failed to meet the minimum capital requirement, while five others, namely Beige, Construction, Royal, Unibank and Sovereign banks, lost their licences in August 2018 were merged to form the Consolidated Bank Ghana Limited (CBG). Later, Heritage Bank also went down in January 2019 and was acquired by the CBG.

Despite repeated agreements between the BOG and the banks to implement an action plan to address these significant shortfalls, the owners and managers of the banks were unable to increase their capital to address the insolvency. Reasons given by the BOG for the revocation the licences were that some of the banks were facing liquidity challenges, while some also acquired their licences under false pretenses by presenting non-existent capital.

Two days ago, two of these banks were hauled to court to face several charges of stealing and money laundering.

We, at The Chronicle, commend the President for bold initiatives taken to bring the perpetrators to book. Our comment is based on the untoward hardships the crisis inflicted upon workers and their families, depositors, and the nation as a whole.

We believe that the numerous jobs and monies lost due to the banking crisis cannot go unpunished, hence our support for the President, and the government as a whole.

It will be recalled that the crisis, the CBG, which was appointed receiver of some of the banks and was supposed to absorb the over 150 branches it inherited from the defunct banks, decided to keep only 93 of them. This got many people worried about the number of people going to be jobless.

Consequently, the President, during his last media encounter in December 2019, confirmed that 3,000 persons lost their jobs as a result of the reforms in their financial sector, adding that "10,000 would have gone out of the window had the government not intervened."

It was also alleged that some of the affected workers had not receive their severance packages more than a year after the collapse of the two banks. We cannot imagine the financial burden it has put on some of these workers and their families.

A media reported indicated that some of them have resorted to doing medial jobs as a result of not finding work to do since the issue dented their images.

The Chronicle, therefore, supports the President and hopes that the process would be hastened, and the attention also given to 347 micro finance institutions that were closed down leading to the loss of about 17,000 jobs.