The banking sector has been sanitized following stringent measures put in place by the governing New Patriotic Party, says President Nana Addo Dankwa Akufo-Addo.
He made this assertion on Tuesday, January 5, 2021, when he delivered his last State of the Nation Address to the 7th Parliament.
President Akufo-Addo said the banking sector clean-up helped to safeguard funds of some 4.6 million depositors.
He said the financial sector risis was the most “difficult problem the government met on coming into office”.
“Many of our banks were in distress and had been kept on unsustainable and artificial life support by the Central Bank. The supervisory agencies were, unfortunately, not performing their duties, and the governance and management structures of many of the banks were clearly not adequate.”
“The Bank of Ghana, under new leadership, intervened, and has restored sanity to the sector, and, in the process, we have saved the banks involved and 4.6 million depositors’ funds. The government has had to find some twenty-one billion cedis (GH¢21 billion) to fund the cleaning up exercise. This exercise has enabled a more robust financial and banking services sector to emerge, the better to finance the rapid development of our nation,” the President explained.
He insisted that prior to the financial sector clean-up, operators in the space were running Ponzi schemes by mismanaging depositors’ funds.
“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 said some of the measures instituted by the government helped to boost the public confidence in the financial institutions in Ghana.