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Minister of Finance Ken Ofori-Atta
Parliament approved Thursday the issuance of a sovereign guarantee of up to 2 billion GH in favor of Ghana Amalgamated Trust (GAT) Limited.
GAT, a government-funded ad hoc vehicle, was formed in December 2018 to raise up to 2 billion GH ¢ and invest in five indigenous banks.
The goal is to save the five local commercial banks that failed to meet the minimum capital requirement of the BoG, set at 400 million ¢
The beneficiary banks are the ADB State Bank and the National Investment Bank (NIB). The others are Universal Merchant Bank (UMB), Prudential Bank and OmniBank, which is currently merging with Sahel Sahara Bank.
GAT has already appointed MM. Albert Essien, formerly of Ecobank, and Eric Nana Otoo, formerly of Goldman Sachs, Mckinsey and Duet, respectively as Chairman of the Board and Chief Executive Officer.
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GAT has committed funds from pension funds and other investors, through a bond program, with proceeds of up to SGH 2 billion, which will be used for equity investments in eligible indigenous banks, as determined by investors. Bonds issued to pension funds will be listed on the Ghana Fixed Income Market (GFIM) for liquidity purposes.
disagreements
The debate on the approval of 2 billion GHc has been completed last Wednesday, but the approval has been postponed due to lack of quorum.
The leader of the majority, Mr. Osei Kyei-Mensah-Bonsu, requested the suspension of approval due to lack of quorum, following the indication of the leader of the minority, Mr. Haruna Iddrisu, according to which minorities would not make the decision to approve the installation. .
The debate on the installation followed the presentation of a report of the Finance Committee, which recommended, by majority vote, the approval of the Special Purpose Vehicle (SPV).
During the debate, the majority and minority parties disagreed on the objectives of the SPV and on the government's commitment to support local banks.
Dr. Anthony Akoto Osei, Minister of Control and Evaluation, led by the majority, said the government wanted to rescue local banks to ensure the continued involvement of local banks in the country's banking sector.
Legislators of the majority said it was crucial that Ghanaians "start taking control of their destiny".
They said that all banks were managed by Ghanaians, with Ghanaians as the majority shareholders, forcing the government to help them meet the minimum capital requirement.
But the minority members led by their leader, Mr. Iddrisu, argued that they did not believe that the solution to help the local banks was based on the SPV because the country would not get the most out of it. .
The minority members of Parliament were wondering why the government was not capitalizing banks but was relying on another organization to support them.
They said such an arrangement would allow the private entity to take over the ownership of local banks with a 30% stake.
Again, the minority members stated that the government did not provide the agreements signed by the board of directors and the shareholders of NIB and ADB supporting the use of the SPV.
Members of the minority also claimed that local bank officials had asked the government to allow them time to raise the minimum capital requirement of 400 million GHc, which had been increased from 120 million GHc, but the government declined.
In response, Finance Minister Ken Ofori-Atta said the SPV was a government attempt to help local banks compete in the banking sector.
He denied that this arrangement would cede the local banks to a private entity.
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