An Economist and Professor of Finance has stated that the financial capacity of government is not strong enough to pay off customers of defunct Diamond Microfinance Limited (DKM).
Professor Godfred Bokpin said there will be a need to borrow money to settle these debts in the face of the current financial challenges the nation’s economy is facing as well as the regular depreciation of the cedi.
“Personally, they are not the ones going to pay, it is going to be loaded onto the public debts,” he told host of Joy FM’s Super Morning Show, Daniel Dadzie, Wednesday.
His comment comes after Vice-President Dr Mahamaudu Bawumia assured customers of all defunct financial institution of 100% payment of their invested funds at a Townhall Meeting in Kumasi on Tuesday.
Customers of DKM had millions of cash locked-up after the Bank of Ghana stopped the company from operating over concerns of violating the microfinance regulations in 2015.
DKM allegedly invested the millions of customers’ deposits into its subsidiaries; DK Airlines, DKM Transport, DKM Mining Company, DKM Shea Butter Company, DKM Fuel Station and a host of others.
In July 2019 the Registrar-General, the Official Liquidator for defunct Diamond Microfinance Limited (DKM), announced that it will from 1st August, begin the payment process of dividends to depositors who submitted new claims.
Examining the promise of the Vice President in a ‘political context’, Prof. Bokpin said the Akufo-Addo government may have identified the displeasure of a lot of Ghanaians after the shutting down of defunct financial institutions.
Thus, “a high level of assurance from the vice president is needful to calm tempers as they all gear into” the political campaign” he explained.
Meanwhile, he stated that the Vice President’s comments which purported that there will be a ‘definite depreciation of the nation’s currency is justified.
“As for the Cedi depreciating you don’t need to bet on that. The Cedi has been depreciating since July 1955. The appreciation we have seen this year is almost an outlier,” the Professor said.
He, however, disagreed that the depreciation of the local currency is due to the recent outbreak of the coronavirus which resulted in slow trade.
“I think to a large extent we cannot assign the performance of the cedi in the first 3 transaction days to a certain virus only” he stated.