Cronyism, exceptionalism killing local financial institutions – Wereko-Brobbey
Former boss of the Volta River Authority (VRA), Dr. Charles Wereko-Brobbey has bemoaned the growing canker of cronyism in the country noting that it is the underlying factor for the collapse of banks and financial institutions.
He believes strongly that the lack of supervision on the part of regulators and failure to hold people accountable is causing local financial institutions to fail.
The retired engineer, speaking on JoyNews’ Newsfile show with Samson Lardy Anyenini, noted that “Clearly there is poor supervision, clearly nobody is held responsible and it sends a very bad signal.”
He was reacting to the Bank of Ghana (BoG) revoking the licences of twenty-three insolvent savings and loans companies and finance house companies.
Dr. Wereko-Brobbey observed that “We seem to shut the stable door after the horse has bolted. Here we are we have a Bank of Ghana which has got a supervision division,” which it is supposed to have sustained supervision and all “these companies are supposed to submit regular returns of their activities [and] they are supposed to be checked.
According to him, “We are supposed to have internal auditors who should preempt a lot of these things but it still going on so I think we should really squarely accept the fact that this country all the people we train and entrust to ensure that things are done properly are not doing so because they are protecting their friends.”
“It seems all the fine rules that we have are always stepped aside largely because of cronyisms and exceptionalism and really until we begin to take to task those who we entrust to make sure things are done properly we are going to get into this mess all the time,” the active citizen added.
Dr. Wereko-Brobbey was worried that banks that have external supervision “are not running into these problems but it is only the local banks who we seek to support that run into these problems where they are not properly supervised, where are there are cronies, church members” running them.
The Bank of Ghana (BoG) has also appointed Eric Nipah as a Receiver for the specified institutions in line with section 123 (2) of Act 930.
According to a statement from BoG, “The revocation of the licences of these institutions has become necessary because they are insolvent even after a reasonable period within which the Bank of Ghana has engaged with them in the hope that they would be recapitalized by their shareholders to return them to solvency.”
The central bank explained in a press release Friday, that the revocation of the licences was necessary since their shareholders have been unable to recapitalise them from insolvency over a reasonable period of time.