SSB, TTB, Merchant bank… who will be next?

It is an irony that whilst new banks are establishing themselves in Ghana by the day and many foreign banks are scrambling for market space in the country because of the profitability of the sector, the Social Security and National Insurance Trust (SSNIT) has on the contrary embarked on disinvesting in the banking sector.

SSNIT started off by selling the Social Security Bank (SSB), a bank they single-handedly established and owned, to Societe General, a French Bank. Then in 2012 SSNIT again decided to sell off The Trust Bank (TTB), another bank they set up and ran. The sale of that Bank was embroiled in all kinds of controversies, from the selection of the transaction advisers to the valuation of the shares and the eventual sale of same to Ecobank.

Then lately, the infamous sale of Merchant Bank Ghana Limited to relatively unknown and inexperienced Fortiz Private Equity Fund which matter is a subject of litigation in the law courts and also in the Parliament of Ghana.

Incidentally all these sales have happened under the Governments of the National Democratic Congress (NDC). SSB was sold in 1999/2000 under President Rawlings while TTB and Merchant Bank were sold under President Mills and President Mahama in 2012 and 2013 respectively.

In 2012, Mr. Kwame Peprah was Chairman of SSNIT when TTB was sold while Professor Joshua Alabi took over as SSNIT Chairman in 2013 to oversee the sale of Merchant Bank.

Although SSNIT has often argued that it is within their power to invest in businesses and also to offload their shares in the same, the multi-cedi question that begs for an answer is who really profits from these transactions? The contributor or the trustee or third parties?

SSNIT has as its vision “to develop SSNIT into a World-Class Pension Administration Institution Dedicated to the Promotion of Economic Security of the Ghanaian Worker through Prudent Investment Mechanisms", with a mission "to provide Cutting Edge Income Replacement Schemes through Improved Business Oriented Methods and State-of-the-Art-Technology for the Benefit of Stakeholders and Ghanaians by Professional, Dedicated and Quality Driven Leadership and Staff ".

The truth however is that, contributors to the Fund hardly have anything to boast off after their years of service and contributions Most Pensioners receive less than a Hundred Ghana Cedis as their monthly pension. Last week SSNIT in a rather embarrassing move, announced that they were going to double the figure to raise the minimum monthly pension to Two Hundred Ghana Cedis, (less than 100 dollars).

What is common in Ghana however is that many private businesses have benefited from the largess of SSNIT to establish their businesses through phony partnerships that end up mostly benefitting the private partners rather than SSNIT or its contributors.

SSNIT has shares in a number of listed companies on the stock market. In addition, the Trust has investments in unlisted equities, commercial and residential properties all over the country but the insatiable desire of the Trust to sell off almost of its shares in the three profitable banks have caused some anxiety in the over One million contributors.

Other financial institutions that SSNIT have shares in include Fidelity Bank, Prudential Bank, SDC Finance and Leasing Company Limited, etc. The sale of TTB in 2012 elicited massive public protests which were led by two pro-government groups, one called BRIDGE and the other, the Coalition for the Protection of Individual Liberties and Constitutional Rights (COPCOR), who called on government to intervene and block the proposed sale.

Another group, the Progressive Road Contractors Association (PROCA), joined the fray later, claiming that the sale of TTB to Ecobank would collapse the road construction industry. The group pointed out that traditionally only TTB, National Investment Bank and the former Amalgamated Bank had supported local road contractors.

Since Amalbank was acquired by Bank of Africa, that support had dwindled and PROCA’s members feared that the same would happen if TTB was swallowed up by Ecobank. SSNIT was adamant to all those concerns and went ahead to dispose of TTB. Similar protests greeted the sale of SSB but they all fell on deaf ears.

Among the concerns many SSNIT contributors have expressed about those sales are: If SSNIT is able to manage other businesses why not Banks, Will SSNIT ever prosecute anybody for running down a Bank as they would to any of their other businesses, Who profits from such sales; contributors, Trustees or Third Parties?