The government has worked with an Advisor and selected Pension Funds to structure a Special Purpose Vehicle (SPV): the Ghana Amalgamated Trust (GAT) to support solvent and well-run indigenous banks, which were otherwise having difficulties meeting the new minimum capital requirement deadline, to meet their obligations.
According to a release from the Finance Ministry, the President of the Republic, Nana Addo Dankwa Akufo-Addo, concerned about the difficulties such well-run, solvent Ghanaian-owned banks were likely to face in raising capital on their own, set up a committee to explore various options available for these banks in order to retain and strengthen local interest in the banking sector.
Based on the Committee’s recommendation, an Advisor was appointed to facilitate the setting up of an SPV: the Ghana Amalgamated Trust (GAT), with the objective of raising funds from the private sector, mainly Pension Funds, to support eligible indigenous banks that successfully completed the due diligence process. Qualifying banks for GAT investment have been determined on the basis of their solvency, local ownership, minimum pre-investment capitalization of GHS120 million and an independent valuation by PwC.
Currently, Ghana’s Pensions Fund is valued at about GHc20 billion. A lot of questions have been raised as to why the government would want to use the Ghana Amalgamated Trust (GAT) to support solvent and well-run indigenous banks?
But the question is why should we put money that we contribute for future use into banks?
Can the private pension funds support these banks with the required funds – GHc2 billion?
On the PM EXPRESS BUSINESS EDITION Thursday, Panelists looked at whether or not it is prudent pension funds could be used to support banks and what is the best practice elsewhere in the world.
Watch the video below to follow the discussion:
Have your say
More Business Headlines
- Unilever Ghana unveils new manufacturing plants in Tema
- Global debt hits $244 trillion
- VW, Ford team up on trucks, eye deals on EVs, self-driving cars
- Databank denies dealing in gold
- No IPO after 4G acquisition – Vodafone CEO announces
- Ghana to leverage Chinese online retail platforms to market cocoa products
- Days of public finance disarray are over – Akufo-Addo
- Zimbabwe to introduce new currency due to dollar shortage
- UK car insurance premiums fall six percent in 2018 - Survey
- It’s like a bet - Man confesses love for Ponzi schemes
- Passion Air suspends operations to Takoradi
- Change in ECG management won't result in price hikes - PURC assures
- Slash prices of renewable energy - Amewu tells international agency
- Ghana's banking sector consolidation trend is credit positive – Moody’s
- Pioneer Kitchenware delisted from Ghana Stock Exchange