Mahama demands ownership of Ghana Amalgamated Trust

Former President, John Dramani Mahama, is demanding the ownership and beneficial shareholders of the Ghana Amalgamated Trust (GAT) and called on the Akufo-Addo administration to curb what he calls a “predatory bailout assault on the remaining banks” in the country through the GAT.

The Trust which is made up of some private pension funds in the country, has been put in place to support five banks that were unable to meet the GH¢400 million capital requirement, but were solvent.

The five banks were: ADB, NIB, merged Omni/Bank Sahel Sahara, Universal Merchant Bank and Prudential Bank.

The government, earlier stressed that the banks in the arrangement must not consider the support they will be receiving as a bailout programme.

However, interacting with Ghanaians on social media, Mr Mahama, described the intervention as a bailout programme, saying the current government, must reveal the beneficial shareholders of the GAT.

“We call on the Akufo-Addo government to lift the veil on the beneficial shareholders of the Ghana Amalgamated Trust and to curb its supposed predatory bailout assault on the remaining banks which include state-owned banks.”

The Government’s decision to support the five banks through the GAT programme, suffered a setback in March 2019, as Parliament deferred the passage of a GHc2 billion cedis sovereign guarantee for use by the Trust.

After a debate on the Finance Committee report which recommended its approval by majority decision, the House did not have the required numbers by law to approve the guarantee.

The Minority in rejecting the deal, said even though it was important to save the banks involved, the government’s approach was flawed.

The former President also described Bank of Ghana’s crackdown in the financial sector as a “national security threat.”

The Bank of Ghana has since August 2017 closed down 420 financial institutions in the country, and according to Mr Mahama, the action by the central bank has not only threatened the survival of the affected companies, but also the country’s security.

“The crisis has created major problems in the banking sector and financial sector including deepening the already widely held mistrust and lack of confidence in the system by Ghanaians. It appears to have no end in sight. It has also dealt a significant blow to the indigenous banks because such institutions have no external support to count on. While this development appears to be a threat to only the businesses that have been shut down, it is in fact a threat to our national security. The development in the banking and finance system and the matters arising call for grave concern on all who have been affected by this financial sector turmoil especially because it is an issue that threatens the country’s security.”

He also said about 20,000 direct jobs have been lost because of the financial sector clean-up.

“About 20,000 people have lost jobs directly due to the 420 financial institutions that have been shut down. We have not even added the indirect jobs…By the time we do the total calculation, about 40,000 to 50,000 people may have lost their jobs,” he added.

During the interaction, Mr Mahama, took on the central bank and the Akufo-Addo government for revoking the licenses of the financial institutions, insisting that there were other better options available.

“Was the revocation the best option at this circumstance or there was no option? Our central bank chose the chaotic situation with accompanying huge debt where the government has no clue on how to clear it.”

Mr Mahama noted that revocation of licenses would have been the last resort for an NDC government.

“Revocation of licenses would have been the last resort and not the first resort. No country is immune to crisis in the financial sector,” he added.

While some have described the actions of the central bank as harsh, others believe it is necessary to strengthen the sector regardless of the impact on jobs, businesses, and individuals.

As part of the sanitising of the banking, specialised deposit-taking institutions (SDI), and non-bank financial institutions (NBFI) sectors, which the BoG says it has completed, the licences of nine universal banks, 347 micro-finance companies, 39 microcredit companies or money lenders, 15 savings and loans companies, eight finance house companies, and two non-bank financial institutions have been revoked.

The news of the revocation of licenses of some savings and loans companies in the country has resulted in many customers of the affected institutions thronging the premises of the institutions to retrieve their monies.