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The Hypocrisy Of John Dramani Mahama And NDC Must Stop-NDP Eastern Regional Secretary   
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Ampah Amoasi Gideon, NDP Eastern Regional Secretary
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The confidence and trust in financial institutions all over the world are built over a period. These institutions are governed by laws and regulations which are key players in the industry.

I would not sound technical because JDM chose the populist route of blaming the government of the day for the happenings in the sector.

The NPP led by President Kufuor in January 2001, took over the economy which had its GDP a little over 3% and foreign exchange reserves could not cover 2 weeks of imports.

Cocoa production dwindled at the time to just above 300,000 metric tonnes per year. Uncontrollable unemployment rate 

and several unpaid contracts for which reason Kufuor and his transitional team went to meet with former President Rawlings and his transitional team at the Osu castle where Mr. Spio Garbrah in a boff said, " We shall see how you will be able to pay workers". These were evidence that the Kufour government inherited an economy on its knees and survival under oxygen.   

President Kufuor started from scratch. Fortunately, because of his humble posture, he received some assistance from Nigerian President Obasanjo. President Obasanjo donated a number of Peugeot cars free to enable Ghana Police to be a bit equipped and mobile.

The Italian Prime minister Berlusconi also at the same time donated second-hand buses to start the Metro Mass Transit.

President Kufuor came with a team of very matured, experienced and dedicated men. The administration started to work slowly but was bent on rebuilding the economy and the nation. 

By the end of the first term, the economy was completely rescued with favourable economic indicators. This was achieved out of the efforts put in by the team who worked tirelessly to shape the economy.  

The introduction of the Cocoa mass spraying exercises in addition to other incentives yielded fruits. Annual production rose steadily, with a forecast to achieve 1million metric tonnes by the year 2010. 

President Kufuor tasked the GNPC to go back to its core mandate and refocus on the business of looking for oil and leave the gold and other businesses it had been wasting time and resources on. 

In the year 2006, oil was discovered which the government welcomed as a potential boost to the economy. Some social intervention policies were also introduced. Which among them included free maternal care, LEAP, NHIS, NYEP, and others

In 2008 when Kufuor's two terms were ending, the economy was strong. The government had drastically cut down borrowing from the local banks resulting in the low interest on treasury bills. As such, the banks had too much money idly sitting in their accounts. This situation forced them to give loans to Ghanaians which also saw a  boom in the housing industry. Business owners and artisans like Carpenters, Seamstresses were encouraged to "come for loans" to expand their vocations and businesses.

This made Ghana rose to be among 'the middle-income countries in Africa.

The country received a lot of praises from the World Leaders for attaining this height. 

Unfortunately, the NPP lost the election to the NDC again in the 2008 general election. The NDC on assuming office saw a buoyant economy. They deliberately started telling the world that " Ghana was broke". This was deliberate because the finance minister Hon Kwabena Dufour at that time wrote to the world bank showing that the economy had been managed well and in good shape. The NDC knowing there was enough money to spend making the NDC transitional team began "partying and giving themselves big allowances" and awarded a number of Judgement debts.

The proceeds of the Oil also started flowing, Cocoa production had gone up hitting 1million tonnes as projected, GDP hit 14%. 

The NDC government seeing all these gains  made by the previous administration ended up chopping the gains all over i.e contract costs were inflated, Banks and  microfinance companies were set up with ulterior motives, Radio and Television stations were set up with  sharp-tongued journalists to host shows which were aimed at defending their paymasters' wrongdoings and attacking institutions that were mandated to protect the public interest. 

The create, loot and share scheme, daylight robbery and economic mismanagement by Mills-Mahama, Mahama -Amissah Arthur is the result of today's economic challenges we are faced with. 

Today, Akufo Addo is faced with the very same situation President Kufuor faced. The economy which had risen to 14% in 2010 was back to 3.7%. Cocoa production had come down to around 700,000 metric tonnes, high unemployment situation, lots of unpaid contracts, despite the level of debts we had accumulated, major projects like "circle Dubai" were never fully paid for. Akufo Addo has so much to do especially dealing with unrepentant looters whose radio and television stations are shamelessly ranting and churning out untruths and coverups. 

Governance is a serious business which requires an experienced hand or a technocrat. Our concern is beyond partisan interest. The opposition NDC leader who is gunning for a return to power in 2020 shed light on the revocation of licenses of the nine banks and 23 savings and loans companies. The situation which has led to mass job losses and mistrust in the country’s financial sector is worrying. 

NDP want to remind him that no country in the world, developed or developing is free from the financial or banking field crisis — for example, the banking industry insolvency crippled Asian countries in 1997/98 (Ariff, Skully & Ahmad, 2007). In 1980, the United States encumbered challenges in the savings and loans industry. Sweden and Norway suffered from the crisis in the banking sector in the 1990s. In 2002, the Central Bank of Malaysia (CBM) introduced an intervention known as a guided merger as a reform to ameliorate the country mentioned above's banking sector credit crunch (Ariff, Skully & Ahmad, 2007). The Malaysian Central Bank consolidated all 54 domestic deposit-taking institutions into ten large-capitalized banks akin to Akufo-Addo led New Patriotic Party administration minted Consolidated Bank Ghana.

The term guided merger implies a decision implemented by the regulator rather than the market. Under the guided merger, a bank most likely to be insolvent was regulated by the Bank of Ghana to merge with a larger bank. Bank of Ghana investigated two fundamental hypotheses that informed a guided merger implemented by the BOG. The efficiency improvement hypothesis, which states that merger may improve efficiency especially when stronger and competently managed banks acquire a weak, and carelessly supervised banks. Risk reduction hypothesis, which asserts that the risk of becoming insolvent will be averted if efficiently managed banks acquire weak depository institutions. The afore-cited researchers found that guided merger was inconsistent with efficiency improvement hypothesis but consistent with the risk reduction hypothesis. These empirically tested findings imply that Consolidated Bank Ghana can only decrease the risk of the acquired weak banks becoming insolvent but cannot guarantee efficiency if the Bank of Ghana failed to monitor religiously.

Liquidity risk (LR) is a threat emanating from a bank’s inability to meet its obligations when they come due without incurring unacceptable losses. Liquidity risk can negatively affect both the bank's earnings and the capital. Thus, it is increasingly necessary for bank managers to ensure the availability of sufficient funds to meet future demands of providers and borrowers, at reasonable costs. Large-scale withdrawal of deposits may create a liquidity trap for banks, but this may not always be the only source of liquidity risk. Long term lending and significant commitment issues could create liquidity risk.

Although the Bank of Ghana (BOG) as a lender of last resort has every right to take appropriate regulatory decisions, the imperative need for BOG prioritizing preserving indigenous banks, must not contend. Clamping down on insolvent banks must be the last resort. I will typically endorse the early intervention such as a guided measure though not bereft of drawbacks. We must read the beginning of the 2011 Arab Spring in Tunisia and relate to Economic Experts comment as to whether the banking crisis can pose a security threat or not. Whoever wins the 2020 election must pursue mercantilism (Economic theory that the country's strength is contingent on accumulated wealth increase export and discourage import) seriously. We believe looking into commercial cotton production in northern Ghana will help Ghana increase export. An only small portion of Mali's land is agriculturally viable, yet cotton export is the backbone of the Malian economy! What are we doing with the massive landmark in northern Ghana? Both leading politicians must factor cotton export into the 2020 manifestos.

Ghana needs, national employment commission to replace public services commission comprising industrial and organizational (I-O) psychologists, human resource management experts to conduct assessment screening for employees for both public and private banking sectors and all state institutions. Many accounting, banking and finance, commerce, management, economics, and I-O psychology graduates are not getting jobs, whereas individuals with unrelated degrees get hired in the banking sector in Ghana. Some managers of state institutions under-declare vacancies waiting for their kids in high school to graduate and employ them. It is increasing unemployment. Once again, JDM must stop the hypocrisy when it comes to building a strong and resilient economy is not a joke; thus, one needs an experienced technocrat to lead the economic management team.

What are the facts??

1. Deposits of customers were locked up in most of these institutions of which they could not have access through no fault of theirs.

2. Most of these institutions were already suffocating with huge debts that threatened the balance of their financial position.

3. The BOG who is the regulator of the sector had to step in to salvage the situation

4. The problems started before the 2016 general elections that brought the NPP into power.

5. The NDC government under JDM looked unconcerned until the situation got to where we are now

6. Under the watch of JDM, the situation could have been worse because he is so incompetent to even appreciate the level of this crisis

7. Millions of depositors' funds have been saved as a result of the actions taken by the central bank.

8. The current government has spent huge sums of money to make sure that the millions of Ghanaians who through no fault of theirs have their funds with these institutions are paid.

Mahama and NDC don't deserve a comeback.

Ampah Amoasi Gideon 

NDP Eastern Regional Secretary 


Source: Daniel Adu Darko/Peacefmonline.com/[email protected]

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