Spend GHC15b to collapse senseless banks – Former Minister

Company News of Wednesday, April 17, 2019

Source: 3news.com

2019-04-17

Murtala Ibrahim Mohammed, former Deputy Minister of Commerce and Industry, said that it was foolish for the government to spend huge sums of money, claiming to represent 18 billion GH ¢ to clean up the banking sector.

The action eventually led to the collapse of seven banks and the degradation of one of them.

Upon his inauguration in January 2017, the administration of the New Patriotic Party (NPP) led by Akufo-Addo, through the Bank of Ghana (BoG), took steps to do what he qualified of "disinfection of the financial sector".

The fiscal year that ended in December 2018 saw some banks fall back, others merge and some job losses.

Although the president praised the exercise and said that saving the 1,177,366 Ghanaian deposits cost the nation about 12.7 billion GH, some members of the minority are skeptical that it was prudent to make a decision.

The former member for Nanton, for example, sees no reason for the government to make such a decision.

On Wednesday of New Day Wednesday of TV3, Mr. Mohammed wondered about the reason behind this exercise and the justification for charging such a cost on an exercise that he said was doing more harm than well.

"Why would you spend about 18 billion dollars to collapse the banks, the government now denies, claiming that they spent about 15 or 16 billion, even though it's huge, you spend so much to collapse the banks? ", he questioned.

"It does not make sense!", He said.

The former legislator said the government could have been a little more pragmatic in its approach to cleaning up the banking sector without necessarily having to collapse the banks, some of which were done arbitrarily.

He lamented the loss of jobs and the collapse of the companies that followed, while recalling that a different approach should be adopted in the future.

He argued that none of the collapsed banks had been wrong to meet its obligations to its customers until the intervention of the government.

"Could the government not take steps to help these banks?" He questioned, baduming the banks did have problems.

But Ledzokuku MP Okoe Boye said the government had to make a tough decision to clean up the banking sector to make it more dynamic. He compared the apparent panic in the current banking sector to a doctor bleeding from a sore to heal.

"I am a doctor. What happens is as if you were bleeding a wound, the wound was poorly managed, no blood was flowing. When a good doctor comes, he exposes the wound, makes sure that it bleeds, any wound that does not bleed, showing the red can not heal, "he illustrated.