Only GH¢1.7 billion has been recovered 4 years after banking clean-up exercise – BoG boss

• The Governor of the Bank of Ghana has blamed the slow recovery of the money spent on banking clean-up exercise on the judicial system

• He said only 6.8 percent has been recovered after several years of the clean-up exercise

• He added that efforts are in place to rope in more revenue despite the slowness in the recovery process

The governor of the Bank of Ghana Dr. Ernest Addison has stated that only GH¢1.7 billion has been retrieved after spending GH¢25 billion to settle depositors of various financial institutions in the clean-up exercise carried out in 2018.

Dr. Addison blamed the slow recovery on the judicial systems in the country stating that, the country courts are not acting as quickly as possible.

He noted that the government spent some GH¢25 billion in cleaning up the sector and paying depositors their funds which were locked up with the defunct financial institutions but the progress made in recovering that colossal amount has been very disappointing blaming the judicial system.

“We are very far from the target. If we have been able to recover just about 7 percent of the work that is done, then it is not encouraging. Part of this problem is what’s going on in our courts; things are not moving as quickly as one would have expected,” he told journalists at a press conference in Accra.

Meanwhile, the government has introduced a new tax for the banking industry this year, known as the financial sector clean-up levy, which is a 5 percent levy on profit before tax of banks, as a move that was met with high resistance from the Ghana Association of Bankers but to no avail.

The new tax levy is to help rope in some revenue to make up for the losses made during the cleaning exercise.

In the budget statement, it stated that: “the financial sector clean-up and the refund of monies to depositors have restored investor confidence and protected the hard-earned savings of millions of Ghanaians. However, this has come at a huge cost to the government. The government will therefore introduce a financial sector clean-up levy of 5 percent on profit-before-tax of banks to help defray outstanding commitments in the sector. The levy will be reviewed in 2024.”

However, according to data from the Bank of Ghana, as of March 2021 only GH¢1.5 billion had been recovered from the banking sector; GH¢132.1million from the savings and loans sector; GH¢77.1 million from finance houses; GH¢33.5 million from micro-finance institutions and more than GH¢870,000 from microcredit companies.

The amount recovered represents just 6.8 percent of the total money spent on the clean-up programme.