GHC28 billion is what is needed to clean-up the banking sector and not GHC15 billion, former President John Mahama has claimed.

In December last year, President Nana Akufo-Addo granted executive approval for the expenditure of GHS15.6 billion to save the funds of depositors of the various financial institutions that were collapsed by the Bank of Ghana as well as shore up the liquidity of the financial sector.

A letter addressed to the Minister of Finance, Mr Ken Ofori-Atta, by the President’s Executive Secretary Nana Asante Bediatuo, said: “The President has granted executive approval for an expenditure of up to fifteen billion six hundred million Ghana cedis (GHS15,600,00,00.00) toward protecting depositors and investors of failed financial institutions and to improve liquidity of the financial sector”.

In the past two years, the Bank of Ghana’s reforms has led to the collapse of nine local banks, 347 microfinance institutions and some 23 savings and loans and finance houses.

The collapse of the nine local banks birthed the state-owned Consolidated Bank Ghana (CBG) Limited.

Heritage Bank Limited (HBL) was one of the last two collapsed banks to have been added to Consolidated Bank Ghana Limited (CBG), which was first formed when the central bank collapsed some five local banks on 1 August 2018.

They included the Royal Bank, The Beige Bank, The Construction Bank, Sovereign Bank and uniBank.

Later on, HBL and Premium Bank were added to the first five.

The BoG on 14 August 2017, approved the takeover of UT Bank and Capital Bank, by the state-owned GCB Bank Limited.



Also, the Securities and Exchange Commission, late last year, revoked the licences of 53 fund management companies.

Speaking on the financial sector in a Facebook interaction, Mr Mahama said: “Parliament, recently, approved GHS15 billion to support the cost of the banking sector clean-up, our estimates show that going by the reckless path this government chose with its attendant job losses and collapse of businesses, an additional GHS13 billion will be required to complete the exercise of the financial clean-up”.

According to him, “This brings the total amount for the bailout to about GHS28 billion”.

“Now, it’s interesting to note [that] government did not make any provision for the cost of the banking sector crisis in both the 2020 budget and the three-year medium-term expenditure framework, there’s no provision for the financial sector clean-up.

“Again, this was done to dishonestly lower the projected budget deficit and give a false picture of satisfactory fiscal performance in 2020, which is an election year.

“This is what a nation reaps when it has a president who thinks predominantly about the next election and not putting things right”, Mr Mahama noted.