Former President John Mahama has promised to restore the licences of financial institutions that collapsed as part of the banking sector cleanup exercise. 

According to him, the licenses were revoked unjustly. 

Mr Mahama said the restoration of the licenses will help build confidence in the financial sector again. 

“We will restore indigenous investment and the banking and investment sector. We will create a tiered banking system that will serve the various segments of the market. 

“We will give an opportunity for experienced banking hands who were laid off to secure their careers once more and move away from the menial jobs that they were forced into. As far as practicable, the banking licenses that were unjustly cancelled by this government will be restored.”

He also stated there that he will advocate for improvements at the Bank of Ghana to curb the re-occurrence of the problem. 

“We will rejuvenate the almost collapsed banks. This will involve sweeping reforms at the Bank of Ghana because the Central Bank itself is a part of creating this problem. 

“I will create the foundation that will ensure that, Ghana will not suffer such a deadly debt management program that is almost taking our elderly people holding government bonds to an early grave and wipe out the investments of the Ghanaian middle class.”

He made this known during his acceptance speech following his victory in the recently ended NDC presidential and parliamentary primaries. 

About the banking sector cleanup 

The government in 2017 undertook the banking sector clean-up under the supervision of the Finance Minister, Ken Ofori-Atta. 

The exercise saw a reduction in the number of banks from 34 to 23, whilst 347 microfinance institutions, 15 savings and loans and eight finance houses had their licences revoked.

A number of the institutions that had the licences revoked were found to have varying degrees of corporate governance lapses. 

The total estimated cost of the state’s fiscal intervention, excluding interest payments, from 2017 to 2019 was pegged at GH¢16.4 billion.

The government in 2020 claimed that it spent about GH¢21 billion on the banking sector clean-up exercise.

Some of the financial institutions that disagreed with the revocation sued the government and the cases are still pending in court.