Vice President, Dr Mahamudu Bawumia says the decision to clean the banking sector was painful but very necessary.

According to data from the Bank of Ghana, the country’s financial system at the time, was on the brink of total collapse, a situation he described as scary.

He also argued that the signs were already seen in some savings and loans companies because some were not paying the depositors.

The Vice President likened the issue to a cancer in the throat that needed to be cut off to avert further spread of the cancerous cells.

“We had a situation where you had cancer and it is in your throat and if you don't cut it off, it's gonna spread and we had to cut it off,” he said.

Dr. Bawumia further explained that government recognized the problem and took courageous steps to tackle the problem. He insisted that, “government is not elected to make the easy decisions and it is the hard decisions that often distinguishes a good government from a not so good government.”

In his view, the measures taken safeguarded the investments of 4.6 million depositors.

“In the end, we saved the banking system and the bigger financial system and safeguarded the hard earned lifetime investments of 4.6 million depositors many of whom are workers. We would have had a collapse and this economy would not have recovered that easily, if everybody lost their savings in the bank,” he added.

He made these comments at the Industrial and Commercial Workers Union's 11th Quadrennial Delegates Conference at the University of Professional Studies, Accra (UPSA).

Speaking on the theme, 'Impact of Covid-19 Pandemic on business and Labour: The role of social partners', Dr Bawumia noted that in all, a total of GH¢21 billion was spent to save the depositors.

He explained that it was also to instill confidence in the banking system, arguing that, "without that rescue package of spending 21 billion cedis, the situation would have been different."

He also rejected claims that the approach adopted was harsh.

“The question therefore arises, was this too bitter a pill, did we go overboard or did the Bank of Ghana go overboard. But thankfully DKM customers have all been paid,” he said