Deputy General Secretary of the National Democratic Congress, Peter Otokunor has hinted that government’s ‘poor’ handling of the Menzgold saga is a deliberate attempt to give Finance Minister’s investment company an undue advantage in that space.
In his assessment of the situation, the Finance Minister, Ken Ofori-Atta’s quest to safeguard his business interests particularly of his investment institution, Data Bank, has significantly contributed to the actions and inactions of government.
Peter Boamah Otokunor believes it is a deliberate action to ‘kill’ competition against the businesses as it is part of a grand scheme by the government.
He accused the Finance Minister and government of engaging in a political game to take over the financial sector of the country.
“It is deliberate, it is conscious, it is an economic turf war. The Finance Minister has Banks, he has investment companies. He is collapsing investment companies. The issue of Menzgold has come to the fore and we think that the government, the approach they used to deal with the issue has not been the right approach because the Finance Minister is also running an investment company that is now dealing in gold collectables. So that tells you that there is an economic turf war. Somebody wants to control the economic breathing line of the country and that is problematic. You don’t do that as a politician, you don’t do that as a government. When you do that you crash the entire financial sector” the Deputy General Secretary detailed.
“Now Data bank is dealing in gold collectables which Menzgold was dealing in. How did they acquire their licence? Perhaps maybe when they identified that Menzgold was not having their licence, couldn’t they have arranged and regularised Menzgold operations. If it is illegal or legal” he questioned insisting that government could have done more to salvage the situation.
BoG, government in a political turf war with Banks
Explaining what he meant by the Government is engaging in a political turf war in the financial sector, Peter Otokunor accused the Bank of Ghana and the Finance Minister of going after institutions that are in one way or another affiliated to an opposition political figure.
He buttressed his argument by citing the revocation of the banking license of Heritage Bank, a wholly Ghanaian bank.
In his opinion, the grounds for their closure and absorption into Consolidated Bank of Ghana isn’t potent and reasonable enough to warrant such an action as the bank met the Minimum Capital Requirement of GHC400 million and developed an acceptable governing culture.
He, therefore, described as unfair the basis for the revocation of their license and noted that it speaks to the political bias of the Central Bank.
To this end, the NDC Deputy General Secretary asserted that the Central Bank was doing something wrong and improper and tasked them to focus on their core mandate.
“You don’t commend the BoG because they are closing banks because they have gotten some license based on false pretence. You ask yourself, what constitutes false pretence? Now we have seen many of the banks already in court complaining that no, this is not fair and that perhaps it is political witch-hunting because perhaps some political heads are behind those banks. It is economic warfare, it is an economic turf war that is going on. It is not regulation” he emphasised.
Ghana doesn’t know what it takes to regulate the financial sector
The Deputy NDC General Secretary alleged that the seeming crisis and negative growth in the sector should be solely blamed on the BoG.
He claimed there is nothing to clean as the sector was growing at more than 20% in 2016 but now growing at -13% despite the cleaning by the regulator.
Peter Otokunor questioned the thinking behind increasing the minimum capital at a time when the government was heavily owing the banks with their figure believed to be more than 40% of the debts.
The Financial Sector according to Peter Otokunor has virtually collapsed because of the mismanagement of the government and their attempt to hijack the system to favour their interests and businesses.
“Under the NPP government the financial sector has virtually collapsed. In fact, it is growing at -13.1% and whiles in 2016 the financial sector was growing at 22.3%. It is not because of the cleanup. The clean up just started and what do you even call the cleanup? The clean up has been more of a political exercise than a regulatory exercise and you and I will bear witness to that. It has been a political exercise. There is nothing to clean. Indeed, this Bank of Ghana administration appears not to know what really it takes to regulate the financial sector and that is why the financial sector is in crisis.” He asserted.
The Deputy General Secretary lashed out, “you don’t extend an increase in your capital requirement from GHC120 million to GHC400 million when you know that government owes about 45% of its debt to these banks and we would need to pay. We owe about 170 billion Cedis and 45% of it is owed to these local banks so, in such a crucial time when the government is in distress and you are unable to redeem credit, you are unable to pay your debts to the local banks you do not increase your minimum capital requirement by over 200 to 300%. You will weaken the banks, they will not be able to make it and make money available.”
The NDC Deputy General Secretary made these comments in an interview with www.ghaanweb.com at the Party’s head office in Accra.
He was responding to a report on the findings made by the Political Science Department of the University of Ghana which hinted that President AKufo-Addo would most likely be re-elected into office after his first two-year performance in government should the nation go to the polls.
Respondents were, however, not impressed with the inability of the government to implement most of their key promises they pledged in the lead up to the 2016 elections effectively.
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