GH¢12.1 bn spent on financial sector clean-up -Finance Minister
Government has spent a total of GH¢12.125 billion to cover the financial sector crisis in the past two years, Finance Minister Ken Ofori-Atta has said.
According to him, the Nana Akufo-Addo led administration issued bonds to raise revenue as well as look for additional capital to clean the mess and to protect depositors.
The minister disclosed this during the presentation of the 2019 Mid-Year Budget Review at the floor of Parliament.
He said, “Government of Ghana (GoG) has had to issue bonds to the tune of GH¢11.2 billion to cover the cost of the financial sector resolution and protect depositors. In addition, GoG had provided an amount of GH¢925 million in cash to cover depositors of the 386 microfinance institutions recently closed down, bringing the total cost to GH¢12.125 billion.”
The government’s intervention in the financial malaise, Ofori-Atta observed, has helped restore confidence in the financial sector.
“Mr. Speaker, the Government’s actions have restored confidence in the banking system. Through the Government’s interventions, significant deposits held by some 2,655,100 depositors (1,525, 550 bank depositors and 1,129,820 Micro-Finance Institutions (MFI) depositors have been saved.”
Many, including the largest opposition party, the National Democratic Congress (NDC) have criticised government for job cuts and losses as a result of the banking sector clean-up but the Finance Minister disagrees.
According to him, over 3,000 jobs have been saved out of the exercise conducted by the Bank of Ghana (BoG).
Ofori-Atta commended the BoG for the banking sector clean-up saying the move has already seen a positive spin-off on the country’s economy.
“The Bank of Ghana’s directive to banks to increase their minimum paid-up capital to GH¢400 million by 31st December 2018 has been successful. This injected fresh capital of GH¢4.2 billion into the banks. The Ghana Amalgamated Trust intervention is expected to lead to a strong indigenous Ghanaian presence in the banking sector.
Mr. Speaker, it is gratifying to note that these regulatory and policy measures undertaken to clean up the financial sector, have already begun to bear fruit,” the minister said.