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Say It Loud



WHO MUST WE BELIEVE?

Author:
Lucky Luciano
Date:
2019-01-10 14:05:49


There seem to be an ongoing test of credibility between Bank of Ghana (BoG), represented by its Governor, Dr. Ernest Addison on the one hand, and sections of the general public, corporate institutions and certain individuals on the other hand.

The brouhaha appears to be caused mainly by the recent decision of the BoG to close down some banking and financial institutions in Ghana for one reason or another, but mainly because these institutions fail to meet Ghana banking and finance regulations.

The latest salvo on bank closure delivered by the BoG hit two banks Heritage Bank and Premium Bank, when on the 4th of January 2019, the licenses of the two banks were revoked. The grounds for revocation of the licence are summarized as follows:

(1) Suspicions relating to the source of the bank's capital and matters related therewith including the claim that it was derived from contracts with COCOBOD which were the subject matter of an ongoing criminal prosecution;

(2) Issues around the shareholding of the bank and alleged nondisclosure of ultimate beneficial shareholders;

(3) several related-party transactions which were not above board

(4) the significant shareholder was not ‘fit and proper”.

Prof Kwesi Botchwey, a financial luminary of no small standing, who once served as longest Finance Minister of Ghana, and an ex-Director of Heritage Bank, came out in a press release to challenge these grounds for revocation of the banks licenses, and when you read his press statement, you have the feeling he makes some very strong and compelling arguments.

The question for we the concerned investing and general public is, "WHAT AND WHO DO WE BELIEVE". It is an understatement to even say the credibility of Ghana's banking system is on the line and hinges on our perception of the conclusions we draw as individuals to these various arguments between the main regulator of the financial system, and the operators in the system.

However, what I wish to bring out in this article is this: "WHAT CONFIDENCE CAN WE PLACE IN THE CURRENT GOVERNOR OF BOG, DR. ERNEST ADDISON".

It will be an understatement to say the general public has lost a fair amount of confidence in the Bank of Ghana. Obviously, BoG was sleeping on the job, for how else could they sit unconcerned until finally they had to revoke the licenses of seven banks at a stretch. These are uniBank Ghana Limited, The Royal Bank Limited, Beige Bank Limited, Sovereign Bank Limited, and Construction Bank Limited, UT Bank and finally Capital Bank.

It is how the BoG dealt with Capital Bank which really raises cause for concern, when the BoG extended to Capital Bank Gh¢610 million as liquidity support, which was then promptly misused by the recipient bank.

However, it must be noted that at the time these questionable activities of these various banks were taking place, Dr. Ernest Addison was not the Governor of the Bank of Ghana. He was appointed by President Akufo Addo in April 2017.

He was not responsible for extending Gh¢610 million liquidity support to Capital Bank. He was not around at the time BoG was checking the veracity of the information provided by Heritage Bank, prior to being issued with a banking license. It was only after he took over that he was in a position to investigate and make decisions on the viability of certain banks.

I would therefore think Dr. Addison deserves to be given the benefit of the doubt, when people like Metro TV’s Good Evening Ghana host, Paul Adom-Otchere, tells governor of the central bank, Dr Ernest Addison, to “sit up” and start conducting himself in a manner befitting his office, since his numerous press conferences and contradictions are uncomplimentary of the office he holds.

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