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Business News of Thursday, 28 July 2022

Source: www.ghanaweb.com

Government will need GH¢8bn to address lingering issues in financial sector – BoG

Governor of the Bank of Ghana, Dr. Ernest Addison Governor of the Bank of Ghana, Dr. Ernest Addison

Government will require between GH¢7 billion and GH¢8 billion to address certain difficulties among financial institutions following the banking sector clean-up exercise.

This is according to the Bank of Ghana Governor, Dr. Ernest Addison, who explained that despite successful reforms in the financial sector, there still remain issues with some financial institutions.

Speaking with journalists during the 107th Monetary Policy Committee press briefing in Accra, Dr. Ernest Addison said, “We had a very successful financial sector reform in cleaning up all the financial sectors. We cleaned all the weak and insolvent institutions but we found out that there are a few more institutions that are also insolvent.

“But unfortunately, this is at a time when the government’s finances are under a lot of stress. So, the problem has been how to get that additional GH¢7 billion or GH¢8 billion from the budget that is already under a lot of strain to clean up these insolvent institutions,” Dr. Addison explained.

The BoG governor added that after five years of the clean-up exercise to restore the sector which cost about GH¢21 billion, some financial institutions were still facing difficulties.

He said the development has since become a headache to the central bank since 2021.

“Hopefully we will find resources which will allow the central bank to deal with that problem. So yes, it is unfortunate for the depositors that are caught up in this,” the governor said.

But Dr. Ernest Addison believes that ongoing engagements with the International Monetary Fund will present an opportunity for Ghana to lay out its problems during the negotiations for an economic support programme.

Meanwhile, some financial institutions which became insolvent as result of the clean-up exercise such as; Seed Fund Savings and Loans and NDK Financial Services are reported to be struggling to pay depositors their locked-up funds.

MA/FNOQ

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