The Dean of the University of Cape Coast Business School, Prof John Gatsi, has lauded the government’s move to inject some GH¢4 million into the recapitalization of the National Investment Bank.
He called on the finance minister to use his office to get the bank back on its feet as the bank has been instrumental in the financing of development projects in the country.
“It has been on the table for a long time that the Minister should use his office to help capitalize NIB. NIB has long been financing development projects in the country that cut across agriculture, the investment in rubber plantations, they support all kinds of construction in the country so it is supposed to be a strategic bank to foster a lot of developments.
“So, this was the expectation long time. But for about four or five years one could not tell why the government decided not to mind NIB. The only important thing that has happened was the continued restructuring that has actually downsized the bank but the real investment that is needed was not coming.”
Prof Gatsi said NIB had been in crisis for quite some time now therefore the government must see through and ensure that money is injected into the bank.
He added that in case the bank collapses, the government will be held liable.
“The bank has been struggling sometimes so if the government now decides to recapitalise it that will be welcome news but there is some noise around the bank to the extent that ADB wanted to merge with that bank and there was a hue and cry.
“So now that the Minister had indicated in the budget that they are going to capitalize the bank, the only thing one could say is that they should be focused and recapitalize the bank if not so, the demise of the bank will be blamed on the government,” he added.
Presenting the 2024 budget statement in Parliament on November 15, 2023, the finance minister said the Financial Sector Strengthening Strategy (FSSS), which was developed to mitigate the impact of the GoG debt operation on the financial sector aims to address outstanding legacy issues following the 2017-2019 financial sector clean-up.
He noted that the Fund offers a solvency window consisting of two distinct sub-funds –namely a US$250 million World Bank-supported sub-fund targeted at qualifying banks and SDIs; and a cedi equivalent of US$500 million GoG-funded sub-fund that will help to recapitalise state-owned financial institutions as well as potentially support other indigenously-controlled financial institutions to improve their post-DDEP solvency.
Ken Ofori therefore added, “Mr. Speaker, in addition, a provision of GH¢4 billion has been made in the 2024 Budget to address National Investment Bank (NIB), distressed SDIs, and other outstanding legacy challenges in the financial.”
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National Investment Bank