NDC MP rates Nana Addo 20% on SMEs

The Member of Parliament for Kintampo North Kwasi Etu-Bonde has rated the ruling New Patriotic Party (NPP) 20% for its commitment towards the growth of small and medium scale enterprise (SMEs)

The legislator disclosed that the current administration has failed to protect local banks by increasing the reserves of banks.

The ripple effects of the banking sector clean-up he lamented affected SMEs.

Contractors and other businesses were badly affected because they had locked up funds there.

Several SMEs have been destroyed and workers have also lost their jobs due to the poor way the administration managed the sector.

Panic withdrawals he added also affected local banks.

”If we are to evaluate the clean-up, I can state that it has destroyed SMEs in Ghana. The clean-up was not properly done,” he added.

Vice President Dr. Mahamudu Bawumia at the Kumasi Townhall Meeting on Tuesday said the erstwhile Mahama administration superintended a banking system that was cancer-ridden.

“Indeed, the current central bank leadership inherited what was pretty much like a body with a cancer in the toe”, Dr Bawumia told his audience on Tuesday, 11 February 2020, explaining that the Akufo-Addo government’s intervention to clean up the sector was timely to avert the worst.

“If you don’t give up that toe in time to end the rot, you’ll soon move from one with a rotten toe to one without a leg because the rot will eventually spread to your hip and then you are going to have to lose the entire leg”, Dr Bawumia illustrated.

The licences of nine local banks were revoked within two years under the Akufo-Addo government as part of the clean-up exercise. Also, 347 microfinance companies, 23 savings & loans firms and finance houses, as well as 53 fund managers, had their licences revoked, too by the central bank and the Securities and Exchange Commission (SEC).

Despite the criticism from the opposition, the Vice President maintained that: “The swift and decisive action taken by the new management team at the Bank of Ghana provided relief for the financial system as a whole through the funds provided by the government for deposit payouts. Ladies and gentlemen, let us remember that the failures of these financial institutions which we witnessed were a direct result of a system of poor licensing, nonexistent capital, weak corporate governance, related party transactions and so on and this has actually hurt so many people – depositors and employees alike”.

In his view, “The NDC government and the previous management of the Bank of Ghana had ample time to address the impending failures; they were aware of the problems in 2015, in the case of banks, and as far back as 2012 in the case of savings & loans and microfinance companies.

“In fact, President Mahama, in the state of the nation address in 2016, stated as follows; and I want to quote the former President. He said: ‘Mr Speaker, over the past five years, there has been a proliferation of microfinance companies. These companies come under the direct supervision of the Bank of Ghana. Unfortunately, lack of effective supervision has resulted in many cases in which microfinance companies licensed by Bank of Ghana have breached the rules and created supposed pyramid schemes that have eventually come crashing down. One such case is DKM. DKM, with super high interest rates between 50 and 55 per cent promise is believed to have caused a loss to its clients of GHS77 million. Many depositors have lost their livelihoods’.

“So, the government were aware of the problem and they had been aware of this problem for over five years, for savings and loans and since 2015 for the banks but they had no courage to deal with the cancer at the heart of the banking system. They had no courage to deal with it”, Dr Bawumia noted.

By: Rashid Obodai Provencal

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