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A member of the minority caucus in Parliament has depreciated the much vaunted reforms of the banking sector by the Bank of Ghana.
According to Isaac Adongo, the supposed reforms in the way they were conducted were not necessary.
Speaking at a conference on Ghana's economy organized by the Coalition for Restoration in Accra, he said the Board of Governors could have supported the banks instead of collapsing them.
The legislator of the National Democratic Congress (NDC) also criticized the process used by the director general of the new Patriotic Party (NPP).
He said that when the NDC wanted to introduce some mental health into the banking sector, it set up a minimum capital of 230 million GH ¢.
"We agreed, however, that not all banks need the same capital," said Adongo.
After establishing the base of 230 million GH ¢, he said, they agreed to work with different banks to determine the level of risk, then the minimum of their capital.
He added that this was done so that the Ghanaian banking sector could ensure that small and large banks "operate in a safe environment".
"We call this project an internal capital badessment that will allow us to hold the banks out of their problems and not to collapse them at the slightest excuse," Adongo said.
He said that when the NPP took power, all they were determined to do was to collapse troubled banks. "They set up a minimum capital of 400 million GH ¢ and could not wait for the deadline."
He added that the constant reminder of the delay caused panic withdrawals that further weakened troubled banks.
In concluding his attack, Adongo said that by the end of 2019, Ghana would have spent $ 20.46 billion "just to collapse the banks". "… it can not be a reform," he said.
What reasons did the BoG invoke for the collapses?
Between 2017 and 2019, seven banks fell. The BoG stated that some of these banks should not have existed at all.
The Sovereign Bank, for example, has been cited as obtaining its license under false pretenses, using non-existent capital.
Others face various liquidity problems, including the registration of a lamentable Capital Adequacy Ratio (CAR).
But the NDC is not convinced. They accused the government of undertaking the reforms from a political perspective.
What did the experts say?
NDC is the only one to criticize the reforms of the banking sector. Various experts and civil society members who evaluated the cleanup praised the BoG for this initiative.
Godfred Bokpin, former head of the finance department of the University of Ghana, welcomed the cleansing, calling it a decisive one.
The International Monetary Fund (IMF) also hailed the cleanup, describing it as timely and necessary.
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