The Former Finance Minister has questioned where government intends to secure funds to pay customers of defunct savings and loans companies.

Seth Terkper, speaking on Joy FM’s Super Morning Show Friday, said there is no provision for the monies in the 2020 budget, hence his dilemma on how the Akufo-Addo government intends to pay the depositors.

“Why is the provision for bailout cost zero in the 2020 budget? Where is the money going to come from? Outside the budget?” he queried.

The former Minister was reacting to President Nana Akufo-Addo’s comments in Parliament on Thursday when reiterated what leaders of his Economic Management Team namely Vice President Dr Mahamudu Bawumia and Finance Minister, Ken Ofori-Atta had said on various platforms. 

Mr Ofori-Atta hinted on Newsfile that customers of the various defunct financial institutions will be paid their deposits in full, by the end of 2020.

During his recent maiden town hall meeting in Kumasi, Dr Bawumia assured depositors whose funds have been locked up in regulated but defunct financial institutions of full restitution of their funds.

Delivering the 2020 State of the Nation Address, President Akufo-Addo said even customers of “DKM which collapsed in 2015 will receive a 100 per cent of their deposits once the validation exercise is concluded.”

But Seth Terkper wants to know where the funds will come from.

Responding to him, Deputy Finance Minister Kwaku Kwarteng said that is not a problem.

According to him, government would create the space to get the money to pay the depositors.

Kwaku Kwarteng

“Governance is about the people, if we have not made provision for it and there is no space in the budget, it is for the government to create that space,” said Kwarteng.

The financial sector cleanup

Government began the reforming the financial sector after determining that most institutions were insolvent.

After eight banks lost their licenses for various infractions including obtaining their licenses under false pretenses, the cleanup was extended to the microfinance sector.

Twenty-three Savings and Loans Companies have since lost their licenses while 347 microfinance institutions have gone down.

The government secured some the GH¢700 which it would use to clean up the sector.

Some GH¢14billion was used for the entire financial sector reform.