Member of Parliament for North Tongu, Okudzeto Ablakwa has suggested the clean-up done by the Bank of Ghana in the banking sector was done without humane social mitigating principles.

This, he lamented has resulted in massive job losses.

“The public policy option current authorities are pursuing in the much touted financial sector clean-up does not appear to me to have factored humane social mitigating principles. Therefore, in the process; the clean-up is cleaning up jobs, cleaning up indigenous entrepreneurship and cleaning up every confidence in the Ghanaian financial and banking sector.”

He was reacting to the revocation of licences of 23 microfinance companies by the central bank, the last of the clean-up done in the baking sector.

The BoG on Friday released a statement announcing the revocation of licences of some microfinance companies over insolvency issues.

According to the central bank, it took these pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the licence of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent. The Bank of Ghana has alsoappointed Mr. Eric Nipah as a Receiver for the specified institutions in line with section 123 (2) of Act 930.

The revocation of the licences of these institutions has become necessary because they are insolvent even after a reasonable period within which the Bank of Ghana has engaged with them in the hope that they would be recapitalized by their shareholders to return them to solvency. It is the Bank of Ghana’s assessment that these institutions have no reasonable prospects of recovery, and that their continued existence poses severe risks to the stability of the financial system and to the interests of their depositors, the statement further said.

But reacting to it, the legislator said “Besides, why do we allow the BoG to apparently abdicate all this while only to show up suddenly with a sledge hammer?

Let’s spare a thought for the mass casualties of the latest BoG revocation of licenses, particularly, workers who woke up today to a tragic and uncertain future.”

Below is the full post from the MP:

In public policy formulation and implememuch-toutedere are always multiple policy options to consider. The consideration of these policy options must necessarily take into account the full social impact, especially on the people and the overall economy.

The public policy option current authorities are pursuing in the much touted financial sector clean-up does not appear to me to have factored humane social mitigating principles. Therefore, in the process; the clean-up is cleaning up jobs, cleaning up indigenous entrepreneurship and cleaning up every confidence in the Ghanaian financial and banking sector.

Besides, why do we allow the BoG to apparently abdicate all this while only to show up suddenly with a sledge hammer?

Let’s spare a thought for the mass casualties of the latest BoG revocation of licenses, particularly, workers who woke up today to a tragic and uncertain future.
the meantime, we ought to recognize that it will be a travesty of justice if this clean-up does not lead to lock-ups of the criminal elements and their collaborators at the BoG.

Then, who watches the watchman? Will the institution I belong to – Parliament, finally awake from its long slumber and in a non-partisan surgical open inquiry take us to a point of never again? Time will tell.