Former President John Dramani Mahama has pledged that the next National Democratic Congress (NDC) government will reinstate the licenses of banks that were unfairly revoked during the government's financial sector reforms, as part of efforts to revive the banking industry and restore financial confidence.
Mahama emphasized the importance of indigenous investment and the need for a tiered banking system that caters to different market segments, providing opportunities for experienced banking professionals who were laid off to reclaim their careers and move away from menial jobs.
He assured that, to the extent possible, the banking licenses unjustly cancelled by the current government would be reinstated to rectify the situation.
The banking sector clean-up, supervised by Finance Minister Ken Ofori-Atta, took place between mid-2017 and January 2020, resulting in the reduction of banks from 34 to 23. Additionally, 347 microfinance institutions, 15 savings and loans companies, and eight finance houses had their licenses revoked.
During his acceptance speech following his victory in the NDC parliamentary primaries, Mahama promised to facilitate the re-employment of staff whose appointments were terminated during the banking sector clean-up.
He also expressed the need for improvements in the oversight functions of the Bank of Ghana, highlighting the regulator's weak oversight of the sector and the hardships caused by the government's domestic debt restructuring.
Mahama vowed to rejuvenate the nearly collapsed banks through comprehensive reforms at the Bank of Ghana, acknowledging the central bank's role in contributing to the challenges faced by the sector.
He stressed the importance of creating a strong foundation to prevent a recurrence of the harmful debt management program that affected elderly individuals and wiped out investments of the Ghanaian middle class.
Many of the institutions that had their licenses revoked were found to have various governance lapses, which prompted the government's intervention. The estimated cost of the state's fiscal intervention, excluding interest payments, between 2017 and 2019 was GH¢16.4 billion.
According to the government's report in 2020, approximately GH¢21 billion was spent on the banking clean-up exercise.
