Former President John Dramani Mahama has expressed his intention to reinstate the licenses of banks that were unfairly revoked during the government’s financial sector reforms, once the next National Democratic Congress (NDC) administration takes office.
He believes that this is just one of several measures that need to be implemented to revive the banking industry and restore financial confidence.
Mahama has outlined his plans to revitalize the banking and investment sector, emphasizing the restoration of indigenous investment.
He aims to establish a tiered banking system that caters to different market segments. Additionally, he wants to provide an opportunity for experienced banking professionals who lost their jobs to regain their careers and move away from menial employment they were forced into.
Whenever possible, the NDC administration intends to reinstate the banking licenses that were unfairly canceled by the current government.
The banking sector clean-up, led by Finance Minister Ken Ofori-Atta, took place between mid-2017 and January 2020. As a result of this clean-up, the number of banks decreased from 34 to 23. Additionally, 347 microfinance institutions, 15 savings and loans companies, and eight finance houses had their licenses revoked during this period.
In his victory speech after winning the NDC parliamentary primaries, the opposition NDC’s flagbearer emphasized his commitment to re-employing individuals whose employment was terminated during the banking sector clean-up.
He also highlighted the need for improvements within the Bank of Ghana, citing the regulator’s inadequate oversight of the sector and the hardships caused by the government’s domestic debt restructuring.
The flagbearer expressed his intention to revive the nearly collapsed banks through comprehensive reforms at the Bank of Ghana.
He criticized the Central Bank’s role in contributing to the problem and pledged to establish a strong foundation that would prevent Ghana from experiencing a detrimental debt management program, which had negatively affected the elderly holding government bonds and eroded the investments of the middle class.
Many of the institutions that had their licenses revoked were found to have various degrees of corporate governance deficiencies.
The fiscal intervention by the government, excluding interest payments, was estimated to have cost GH¢16.4 billion between 2017 and 2019.
The government claimed to have spent approximately GH¢21 billion on the banking clean-up exercise in 2020.