The Dean of University of Cape Coast School of Business, Prof. John Gatsi has said if the GHC15.6 billion additional money government is seeking Parliament to approve ‘for Financial Sector Cleanup’ has gone through it will mean that a total of GHC28.9billion will be spent on the exercise which is 34% of the 2020 expenditure budget.
According to Prof. Gatsi in a short article posted on his facebook page and sighted by Awake News, half of the GHC28.9billion if was made available through an alternative approach would have strengthened the financial sector.
He also revealed that the additional amount, GHC15.6 Billion being requested by the Finance Minister, Ken Ofori Attah is about 18% of the total expenditure of the 2020 budget and quizzed “What at all is the budget for the financial sector cleanup?”
“If this amount is approved then a total of GHC28.9billion would be spent on the exercise which is 34% of the 2020 expenditure budget.”
Background:
Since the assumption office in 2017, President Akufo-Addo led government has embarked on what they call “cleanup of the financial sector”. This has led to the collapse of about 16 universal banks, 23 savings and loan companies and 400 microfinance/credit.
The exercise was estimated to have cost the government about GHc13.3billion.
Also in November 2019, the government through the Securities and Exchange Commission has revoked the licenses of 53 fund management companies.
It was reported yesterday that, the Finance Minister Ken Ofori-Atta has failed to secure approval from the finance committee of parliament for an amount of 15.6 billion cedis for the banking sector clean-up.
The additional amount, according to a memorandum to parliament from Mr Ofori-Atta on November 28, 2019, is to be used to “protect depositors of failed financial institutions and improve liquidity of the financial sector”.
However, a meeting convened Thursday, December 5 by the finance committee with officials of the ministry regarding the request ended inconclusively. The ministry failed to provide the information sought by the ranking member for the Committee Cassiel Ato Forson in order to assist the Committee make a determination regarding the appropriateness of the request.
In a letter to the chairman of the finance committee Dr Mark Assibey-Yeboah copied leadership of parliament, Mr Ato Forson requested for documentation on the absorption of UT and Capital Banks by GCB Bank following revocation of their licenses in 2017, the 7 banks which were collapsed into the Consolidated Banks among others.
According to the Ajumako Enyan Esiam lawmaker the information “will assist us carry out appropriate due diligence in the performance of our oversight duties as members of parliament and to establish the need to commit public funds of fifteen billion six hundred million cedis”.
Request
Officials of the finance ministry who were present at the meeting, however, failed to provide documentation as demanded.
The development compelled the chairman for the committee to end the meeting without any agreement regarding approval of the over 15 billion cedis for the banking sector clean-up exercise. The amount of government is seeking if approved will bring the total amount to be used for the exercise to over 29 billion cedis according to analysts.
By: Efo Korsi Senyo / awakenewsroom.com