Audio By Carbonatix
President Nana Akufo-Addo has emphatically stated poorly managed local banks cannot expect government support following the collapse of seven banks.
The President expressed frustration while interacting with the Ghanaian community in Rwanda that after pumping ¢8bn of taxpayer's money into these banks, its poor liquidity challenges still persisted.
From August 2017 to August 2018, seven banks The Beige Bank, uniBank, UT, Capital, Sovereign, Construction and Royal banks have had their licenses withdrawn.
The Bank of Ghana pumped more than ¢2billion to support uniBank founded by a former governor of the Bank of Ghana, Dr. Kwabena Duffour.
Capital bank also received ¢610m bail-out money from the Bank of Ghana. But of this amount, ¢195m ended up being used to set up the Sovereign Bank. Both banks have now collapsed.
Bankrolled by the government, a new indigenous bank, the Consolidated Bank of Ghana has taken over the assets and liabilities of The Beige Bank, uniBank, Sovereign, Construction and Royal banks.
Before this, GCB took over the assets and liabilities of UT and Capital banks.
Retrenchment figures are expected to hit 2,700 by September 2018 as GCB has laid off up to 1,000 former UT, Capital banks while CBG is expected to sack 1,700.
Government has been criticized in some quarters for failing to support local banks.
Breaking his silence on the bank crisis, the President said local banks play a very important role in the banking sector.
"We cannot have a situation where dominant banks on the country are all foreign banks. It is very dangerous for our future".
But he would prefer one "much stronger" indigenous bank in addition to GCB than seven "inefficient poorly managed" indigenous ones. He said the CBG will provide the indigenous leadership needed.
"If our own indigenous banks are performing poorly…at the end of the day, if we don’t take care that is what will happen [ collapse]", he said. The President stressed local banks are not above the "rigorous" law of free market economics which rewards efficiency.
"The law of the market will have it that, if you are not performing efficiently you will go under."
The country now has 31 banks serving its estimated 27 million population.
Latest Stories
-
Nigeria’s richest man Dangote escalates oil fight with regulator, seeks corruption probe
34 minutes -
AfDB seeks $25bn for low-cost lending amid waning US engagement
45 minutes -
Grand Theft Auto game creator sacked us for trying to unionise
56 minutes -
Benin have point to prove at Afcon after World Cup pain
1 hour -
UK and South Korea strike trade deal
1 hour -
Trump urges Xi to free Hong Kong’s Jimmy Lai
1 hour -
Trump sues BBC for defamation over Panorama speech edit
2 hours -
Ford to scale back electric vehicle plans, taking $19.5bn hit
2 hours -
What’s next for TikTok in the US as deal prospects remain uncertain?
2 hours -
Medicinal cannabis company to create 100 jobs in Scottish expansion
2 hours -
‘It’s outrageous’ – JetBlue pilot decries near collision with US military aircraft
2 hours -
Two victims named as hunt resumes for Brown University gunman
3 hours -
French court jails Congo ex-rebel leader for 30 years
3 hours -
Nigeria’s inflation rate eases further in November
3 hours -
NPP Primaries: Yagaba Kubore constituency vows to deliver 100% victory for Bawumia
5 hours
