President Akufo-Addo has explained that the state of the country's banking and the financial sector was the most difficult problem his government inherited in 2016.
According to him, many of the banks were in distress and had been kept on unsustainable and artificial life support by the Central Bank.
Speaking at his last State of the Nation Address in his first term of office, President Akufo-Addo said "The supervisory agencies were, unfortunately, not performing their duties, and the governance and management structures of many the banks were clearly not adequate. If truth be told, many of the finance houses were running what can only be called glorified Ponzi schemes and had lured many depositors into these schemes. We were in a desperate situation, and urgent, radical measures had to be taken to prevent the collapse of the entire financial and banking sector"
He also explained that the Bank of Ghana, under new leadership, intervened, and restored sanity to the sector, and, in the process, have saved the banks involved and 4.6 million depositors’ funds.
Touting his government's success, he expressed that his administration had to find some twenty-one billion cedis (GH¢21 billion) to fund the cleaning up exercise.
President Akufo-Addo also explained that the exercise has enabled a more robust financial and banking services sector to emerge, the better to finance the rapid development of the nation.
"Mr. Speaker, there are painful lessons that we all have to imbibe from this debacle. There is no question but that many people got attracted to the unsustainable high-interest rates that some of these financial houses were offering. In all financial dealings, we have to accept what the experts tell us that, whenever whatever on offer sounds too good to be true, it invariably ends up being untrue and unsustainable. The government is committed to paying all validated claims, and I expect the process to be completed soon after the courts grant the liquidation orders for the remaining failed fund management companies" he stressed.
President Akufo-Addo also noted that the government since the assumption of office has increased annually the budgetary allocations to all the accountability institutions of State, including Parliament and the Judiciary, with the latter, for example, being the beneficiary of ninety (90) newly constructed courts across the country.
Story by: Joshua Kwabena Smith