Banking crisis developed under Mahama’s watch - Bawumia

Banking crisis developed under Mahama’s watch - Bawumia

- Dr Bawumia has hit out hard at the NDC flagbearer, Mahama again

- The Vice President has opined that John Mahama did nothing to deal with the problem when he was president

Vice-President Dr. Mahamudu Bawumia, says the clean up of the banking and financial sector was not misplaced or mishandled like Mahama wants Ghanaian to believe.

Responding to claims by the former president John Dramani Mahama that the financial sector mess was created by the current government, Dr Bawumia said Mahama watched the mess in the banking sector grow during his tenure as president.

Dr. Bawumia gave his response at the launch of the United Nations Office for Project Services (UNOPS) $5 billion initiative to build 100,000 affordable homes in Ghana.

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Dr. Bawumia stated that former president Mahama claims that the problems in the banking sector could have been handled differently, for example through the Non-Performing Assets Recovery Trust (NPART) which was set up under the Financial Sector Adjustment Programme (FINSAP) in 1990 as a vehicle to acquire the non-performing loans of distressed banks demonstrates his limited understanding of this issue.

Mahama, he argued, forgets that almost all the NPLs transferred to NPART in the 1990s were from 5 or so state-owned banks, with NPLs from the only three private banks constituting a mere 4%.

Also, he does not mention that the same NDC government deemed it wise to close banks after the NPART had shown that it was not a panacea for dealing with banking sector crisis, hence the liquidation in Ghana of BCCI in 1999, and in 2000 the closure and liquidation by the Bank of Ghana of the Co-operative Bank and Bank for Housing and Construction, incidentally at a time when Mr. John Mahama was Minister of Communications and had to explain the reasons why those banks could not be saved by the then Government.

“Today, does he not know that keeping “dead” financial institutions alive by public funds under the pretext of “too big to fail” destroys the financial system and the economy as a whole? Actually many of the financial institutions which had their licenses revoked could not even pay customers their deposits of as little as GHC300."

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"The Bank of Ghana under its current leadership has shown courage by taking the “bulls by the horns” and dealing decisively with the problems created under the Government of John Mahama, to avert the collapse of the entire financial system

"But where from John Mahama’s new found care for indigenous firms? Does John Mahama know how many indigenous firms collapsed under 4 years of dumsor? Why didn’t his government bail them out? Why this sudden love for collapsing indigenous firms? Where were the specific policies to support them? Does he know how many jobs were lost? What did he do about that if he cared so much about jobs?" Bawumia questioned.

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