Bolga Central lawmaker Isaac Adongo has accused Vice-President Dr Mahamudu Bawumia of peddling falsehood when he told Ghanaians in April this year that the recapitalisation exercise undertaken in the banking industry added GHS4 billion of fresh capital to the sector.

According to the outspoken opposition lawmaker, only close to half of Dr Bawumia’s figure was added to the sector as a result of the recapitalisation exercise which led to the revocation of the licences of nine local banks.

The Daily Graphic’s website reported in April that Dr Bawumia praised the banking sector reform exercise, which had been recently concluded at the time, saying it was a timely intervention that injected in excess of GHS4 billion in fresh capital into the banking industry.

The clean-up exercise, he said at the maiden Town Hall Meeting of the Economic Management Team also created a well-capitalised and liquid banking sector that is well-positioned to improve the flow of funds in the economy and to drive private-sector-led growth and development.

Dr Bawumia at the time said the fruits of the exercise were already showing, with the central bank reporting that “private sector credit growth has gained some momentum, stemming from improved liquidity position of the banks on the back of the recapitalisation exercise”.

“Annual growth in private sector credit was 21.1 per cent in February 2019, compared with 2.4 per cent growth in the same period of 2018. In real terms, private sector credit expanded by 10.9 per cent,” Dr Bawumia quoted a BoG April 1 Monetary Policy Committee press statement.

In a writeup, however, Mr Adongo said: “When we say the Vice-President, Dr Mahamudu Bawumia, always tells untruths, people think we say it for fun.

“Now, this is one piece of evidence so loud and gigantic that he can't run away from: PwC, which conducted a survey with bank executives found that the so-called recapitalisation exercise brought in only GHS1.5 billion in fresh capital.

“However, Dr Bawumia recently reported that the same recapitalisation injected GHS4 billion in fresh capital into the banking sector”, he noted.

According to Mr Adongo, “The PwC survey covered 19 banks but before Dr Bawumia finds solace in that let's ask which banks didn't participate. PwC listed the banks that didn't participate as UMB, NIB, Consolidated Bank and Omnic-BSIC Bank. Now, three of those ‘absentee banks’, (UMB, NIB and Omni-BSIC) are some of the GAT banks that have been ‘recapitalised by mouth’. This is because not a single pesewa has actually gone into any of them in the name of recapitalisation”.

He continued: “Consolidated Bank, which is the fourth, was recapitalised with GHS450 million. Thus, if we add that to the GHS1.5 billion that the PwC survey found to have been fresh capital injection, we will get GHS1.95 billion, not even half of Walewale Adam Smith's concocted GHS4 billion fresh injection. So, this begs the question: why does Dr Bawumia relish falsehood with drooling glee as if that's his delicacy when the matter in issue is so very easily verifiable?”

Read Mr Isaac Adongo’s full writeup below:

HON ISAAC ADONGO WRITES;

Why does Vice-President Dr Bawumia take delight in being untruthful?

When we say the Vice-President, Dr Mahamudu Bawumia, always tells untruths, people think we say it for fun.

Now, this is one piece of evidence so loud and gigantic that he can't run away from. PwC, which conducted a survey with bank executives found that the so-called recapitalisation exercise brought in only GHS1.5 billion in fresh capital.

However, Dr Bawumia recently reported that the same recapitalisation injected GHS4 billion in fresh capital into the banking sector.

The Vice-President actually said this at a Town Hall Meeting of the Economic Management Team in April this year, where he embellished the facts in accounting for his stewardship in government.

Yes, the PwC survey covered 19 banks but before Dr Bawumia finds solace in that let's ask which banks didn't participate.

PwC listed the banks that didn't participate as UMB, NIB, Consolidated Bank and Omnic-BSIC Bank.

Now, three of those "absentee banks", (UMB, NIB and Omni-BSIC) are some of the GAT banks that have been "recapitalised by mouth". This is because not a single pesewa has actually gone into any of them in the name of recapitalisation.

Consolidated Bank, which is the fourth, was recapitalised with GHS450 million.

Thus, if we add that to the GHS1.5 billion that the PwC survey found to have been fresh capital injection, we will get GHS1.95 billion, not even half of Walewale Adam Smith's concocted GHS4 billion fresh injection.

So, this begs the question: why does Dr Bawumia relish falsehood with drooling glee as if that's his delicacy when the matter in issue is so very easily verifiable?

We can only conclude that when the fundamentals are weak, lying will become the only option.

But now that PwC has settled the issue on how much the recapitalisation yielded in fresh capital, I hope the Bank of Ghana, the Ministry of Finance and Dr Bawumia will revise their notes and honourably admit that the exercise did less to make the sector capitalised contrary to what they have been telling Ghanaians.

It is worth underscoring the fact that the GHS1.5 billion fresh capital injection came at the cost of Dr Bawumia and Nana Addo collapsing 9 banks, 23 savings and loans companies, 347 microfinance companies and wasting over GHS23 billion of taxpayers’ money.

It also led to the wiping off of the SEC-regulated finance industry.

It is only a myopic and overhyped helium-filled economist who will describe a set of banking sector reforms with such abysmal outcomes as successful and leading to the sector being well-capitalised. For such a person, well-capitalised banks are banks with minimum capital irrespective of the level of stress, risks and weaknesses on their balance sheets.

Let it be known that in a risk-based financial regulation, a well-capitalised bank is one with adequate capital to mitigate the risks and weaknesses on its balance sheet and not just with a regulatory-required minimum capital.

This is measured by capital adequacy defined by Basell II/III framework and stringent requirements of the various IFRSs.

Ghana's capital adequacy in this regard is just 13.5% above the risk-based minimum capital adequacy and in danger of falling below the 13% minimum threshold as IFRS9 is now seriously threatening to wipe off the loan books of our banks.

This is a shame, given the costs and adverse consequences we have had to endure for this calamitous exercise.

Under normal circumstances, I would have asked Dr Gideon Boako, Dr Bawmia's spokesperson to have advised him to stop peddling falsehoods and basing his conclusions on wrong assumptions.

However, given recent events, when he also peddled falsehood in an attempt to defend his boss, I am tempted to say the Vice-President's office lacks the sincerely of mind and thoughts to be taken seriously by any well-meaning Ghanaian.

Need I say more? A purge of the falsehood traits in Dr Bawumia's office and the deliberate attempt to deceive Ghanaians is a must!

In conclusion, let me say that we will be doing this country, its experts and scholars, a very great disservice if we allow falsehood to go unchallenged.

This is because, ordinarily, a Vice-President, by virtue of his position in the economic management, is supposed to be a credible source of reference for our scholars.

Going forward, we urge every scholar and or civil society fellow who wishes to reference Dr Bawumia to "fact-check" same before inadvertently proceeding to be a conduit for the perpetration falsehood.



Your integrity is a priceless one that should matter to us.