Ghana’s banking sector clean up cost GH¢21 billion
- The cost of the ongoing financial sector clean up is likely to reach GH¢21 billion by close of 2019, according to new figures by Finance Minister, Ken Ofori-Atta
- This is equivalent to GH¢21 billion using the Bank of Ghana’s dollar transaction rate for commercial banks
- The Finance Minister speaking on the floor of Parliament said the government had to step in to protect the integrity of the sector as well as protect depositors and save over 3,000 jobs
The Finance Minister Ken Ofori-Atta has hinted that it could cost the country up to $4 billion (GHc21 billion) in order to clean up the financial sector.
Mr. Ofori-Atta delivered the 2019 mid-year budget review on the floor of Parliament on Monday, July 30.
He said government’s swift intervention in the banking situation helped save the jobs of about 3000 people in the sector.
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According to him, the government had to act fast in order to protect the integrity of the sector and also protect depositors.
He then hinted that it could cost the country a whopping $3 million to $4 million to clean up the financial sector.
“And, let me be very clear here, we were at the precipice of a major fiscal meltdown and let no one indulge in self-serving oratory,” the Finance Minister said.
“The end cost may be anywhere from USD 3 to 4 billion, a poison pill from the previous government.”
A sum of GHc11.2 billion has already been provided by the government to secure depositors’ funds of banks that have become insolvent.
There has also been an amount of GHc1 billion set aside by government to clean up the Microfinance sector.
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“The threats posed to the stability of the financial system and the economy at large were enormous, justifying the bold actions taken by the Bank of Ghana. The Government has demonstrated its commitment to providing timely relief to depositors whose funds were at risk as a result of the demise of the defunct banks and SDIs,” Mr. Ofori-Atta explained.
“Government’s actions have restored confidence in the banking system. Through the Government’s interventions, significant deposits held by some 2,655,100 depositors (1,525, 550 bank depositors and 1,129,820 MFI depositors) have been saved. Over 3,000 jobs have also been saved.”
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Source: YEN.com.gh
