According to him, rather criticising the New Patriotic Party’s administration for the job loses, Ghanaians should rather praise the ‘elephant’ party for saving funds of millions of depositors in the banking clean up exercise between 2017 and 2018.
Mr. Otchere-Darko made the remarks in his latest article in response to concerns raised by a friend of his whom he said had wondered whether bankers who lost their jobs in the banking sector clean up would ever vote for NPP in the 2020 general elections.
He noted “yesterday, a good friend said to me that NPP cannot expect the bank workers who have lost their jobs as a result of the banking crisis to vote NPP in 2020.”
According to him, “my response was: “I guess it is understandable. But, what about the over one million depositors who would have lost their savings completely had the NPP government not acted against the toxicity that would have eventually overwhelmed the entire industry?”
He said “I think we should tell the story better. GH¢11.2 billion, which was not budgeted for, has been spent to secure the funds of depositors in the collapsed banks. Ironically, the Govt is receiving no applause for this.”
Explaining further, he indicated that “note: this amount is more than the $2bn Sinohydro facility that we have praised so much! This is GH¢11.2 billion that could have fixed our roads, schools, drains, health centers, etc.”
Spare a thought for this Government for being forced by circumstances not of its own making to spend good money not on its own priority programmes but on others’ negligence and alleged crimes, according to him.
“The fact that has not been told boldly is that the National Democratic Congress messed up the Banking system,” he stated.
He explained that “they (NDC) led the Banking sector to near collapse by creating a laxed system which allowed various unconventional practices in the sector.”
Mr. Otchere-Darko added that “it is this which is being fixed by the New Patriotic Party and at great cost to you, the taxpayers! Know who to blame and no who to praise.”
“Specifically, during the NDC regime, according to the evidence, some Banks engaged in the following activities which compromised their capital and liquidity, leading to their collapse: poor regulation and irresponsible corporate governance practices, circumvention of banking laws which resulted in some Banks obtaining licenses under false pretences, false financial reporting as well as insider dealings,” he mentioned.
He added that the Bank of Ghana, under the NDC government, effectively condoned under-provisioning and related-party lending to the perverse extent that the bad practice irreparably damaged the capital adequacy for some of the Banks.
He said “they were riding on limited stock of steroids and effectively false pretense.”
According to him, non-performing loans also increased since banks were saddled with public sector legacy debts, including a $2.4 billion energy sector legacy debts, to the point that oil trading companies were also collapsing; a calamity that would have eventually affected our capacity as an economy to even import refined petroleum products for essential consumption.
“The Bank of Ghana, under the NDC government, tried to sweep the problem under the shredding carpet, and managing the worsening situation by providing liquidity support to these failing Banks in a way which they ought to have known was simply not sustainable.”
He recounted that to address the crisis, the NPP government upon assuming office had a banking crisis that they did not create to deal with and quickly had to come up with bold and innovative interventions to restore confidence in the sector and also to protect Ghanaian depositors, businesses and Banks.
He added that the Bank of Ghana with the support of the government embarked on a comprehensive and innovative reform agenda with the objective of cleaning up the sector and strengthening the regulatory and supervisory framework for a more resilient banking sector.
“These are actions of a government that cares about the destiny of the country, the fate of its economy and the wellbeing of the people,” he said.
Specifically, the current government undertook the following activities to salvage the situation: the Government and the Bank of Ghana intervened to prevent a banking crisis by initially injecting GH¢11.2 billion of public funds into the financial sector; these measures saved not only the deposits of one million, one hundred and forty-seven thousand, three hundred and sixty-six (1,147,366) Ghanaians and their businesses and the people they employed, but also minimized job losses in the banking sector, as well, he said.
He urged that “we should not underrate the monumental rescuing job the NPP has done for the banking sector in Ghana. We will see the benefits for a long time to come.”
He noted that “by the time this entire cleaning up exercise is complete by next year (banks, savings & loans, micro finance and asset managements), over GH¢14 billion of your money as Ghanaian taxpayers would have been spent on it.”
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