The Governor of the Bank of Ghana (BoG) Dr. Johnson Asiama has taken over as the new chair of the re-constituted board of the Ghana Deposit Protection Corporation (GDPC).

The position has been traditionally been held by the Governor of the Bank of Ghana since the establishment of the corporation.

Other members of the board include the Chief Executive of the Ghana Depositors Corporation Mr. Galahad Alex Andoh, Mr. Benjamin Kwabla Amenumey, and Mr. Paul Kwasi Agyemang.

The rest are Mr. Seth Twum Akwaboah , and Prosper Ayinbilla Awuni.

Background

The Ghana Deposit Protection Corporation (GDPC) was established in 2016 by the Ghana Deposit Protection Act, 2016 (Act 931)

While the Act was passed in 2016, the corporation however became operational on September 30, 2019. 

This led to the creation of the Ghana Deposit Protection Scheme.

The object of the scheme is to support the development of a safe, sound, efficient and stable market-based financial system in Ghana, by ensuring prompt payouts to insured depositors on the occurrence of an insured event.

Ghana's Deposit Protection Scheme was conceived based on feasibility studies conducted in the year 2012 and with collaboration between the Bank of Ghana and the Government of Ghana.

Financial support and technical assistance was also provided by the German Government through KfW, a German state-owned development bank.

Focus and proposed reforms

Speaking after the board was sworn into office by Deputy Minister of Finance, Thomas Nyarko Ampem, the Governor noted that his immediate priority is to secure, the swift passage of the amended Ghana Deposit Protection Act, adding “that the reforms proposed are far-reaching and timely”

The Governor noted that the proposed reforms will not only give the corporation payout responsibility but also “emergency funding mechanisms and resolution when financial institutions show signs of distress”.

 “We must ensure these reforms are passed and implemented without delay, in close collaboration with Parliament and the Ministry of Finance”, he said.

On Strategy, he observed that the corporation must embed within its self the plan that will ensure that   “Ghana’s evolving financial architecture, includes fintech’s and digitized services as well as the growing prominence of Special deposit taking institutions”.

Funding Strategies

Dr. Asiama is also of the view that a lot must be done to ensure that the Depositors Protection Fund widen its coverage area and scope.

This, he believes will ensure that it does not only cover traditional banks, but also supporting specialized Deposit- Taking Institutions in the country which remains relatively undercapitalized.

He added that the Deposit Protection Corporation must pursue a multi-pronged strategy which will:

-- Accelerate premium collections to scale the fund.

-- Diversify the fund’s portfolio across gold, FX reserves, high-grade sovereigns, and supranational to protect value and liquidity;

-- Institutionalize emergency credit lines and backstop funding, so that when the need arises, the Corporation is not found scrambling.

“Our goal is to ensure that GDPC is always payout-ready—because in a crisis, timing is everything” he added.