BankingFinancial ServicesGhana

Blame John Mahama for banking sector crisis, says NPP

The New Patriotic Party says the Mahama government’s management of financial services was irresponsible and near catastrophic

The New Patriotic Party has blamed the erstwhile John Mahama government for the banking sector crisis. Between 2017 and 2019, some 347 microfinance and 23 savings and loans companies collapsed under the pressure of bad corporate governance, liquidity challenges and other difficulties.

While the government had paid all depositors of the various defunct banks, it issued a zero-rated coupon for customers of microfinance firms and savings and loans companies which would have matured within five years.

However, the official receiver for collapsed microcredit companies, Eric Nana Nipah, announced in a communiqué on 15 September 2020 that the government had released GHC3.6 billion, to be paid to the affected customers.

Staved off collapse

Addressing a press conference yesterday (21 September 2020), the former NPP national organiser Nana Akomea, who is now the managing director of the State Transport Company, blamed the inefficiency of John Mahama’s government for the near-crisis that occurred in banking between 2016 and 2018.

“Let me state emphatically that the banking sector crisis we witnessed in the country was caused by the NDC. It will be recalled that the 2016 Financial Stability Report of the Bank of Ghana revealed that bad loans on the books of commercial banks in the country increased by 14.9% to GHC4.52 billion in 2015, against the GHC2.72 billion recorded in 2014.

“Also, the economic and financial data from the central bank showed that non-performing loans (NPLs) rose sharply from 11.2% in May 2015 to 19.3% in May,” Nana Akomea said.

The party said that, “The NDC’s intervention to provide liquidity support to banks which were on the verge of collapse without effective supervision was catastrophic, to say the least. Monies allocated to safeguard depositors’ funds were insensitively misappropriated by heads of banking institutions, with the government making no effort to demand accountability.”

Gemma Appiah

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