Did Finance Minister Lie to Parliament on NIB and ADB Merger?

Ken Ofori-Atta, Minister of Finance, Ghana

Accra, Ghana, November 21, 2018//-It appears that Ghana’s Minister of Finance, Ken Ofori Atta is taking the representatives of the people for a ride in his attempt to ‘kill’ the National Investment Bank Limited (NIB) and Agricultural Development Bank Limited (ADB).

According to Bloomberg news agency report, “Government will complete the merger of Agricultural Development Bank Ltd and National Investment Bank Ltd before the end of the year.

This happens as the central bank’s Dec. 31 deadline for lenders to meet new minimum-capital requirement approaches”.

However, Ofori Atta on Thursday, November 15, 2018 told Members of Parliament (MPs) that the government would set up a new National Development Bank.

While presenting the 2019 Budget Statement and Economic Policy of the Government, he said: “Mr. Speaker, work on the establishment of a National Development Bank to focus on industry and agriculture progressed steadily in 2018.

A technical committee appointed by Government has completed its work and has proposed, among others, that the institution should be set up as a completely new institution”.

Mr Ofori Atta continued: “Government has accepted the recommendations and set-up a project team to operationalise the recommendations in order to launch the bank in 2019”.

Is National Development Bank different?

So, Ghanaians are wondering whether the National Development Bank is different from the merger of the NIB, and ADB.

National Investment Bank is owned 97 percent by government, while the Agricultural Development Bank reverted to state-owned bank in July when the Bank of Ghana (BoG) cancelled deals for more than half of its shares following initial public offering (IPO) in 2016.

In the case of the two banks merger, the government is seeking a legal protection from the House of Parliament.

To this end, plans are far advanced by the Ministry of Finance to lay the merger between (ADB) and the NIB deal before Parliament, next year.

There won’t be any major job losses part from the consolidation of the management of both banks.

The good news however is that the government would capitalize it with GHC500 million and make it stronger for financing of government’s development and investment activities.

But workers of the banks are against the merger. To this end, the International Commercial Workers’ Union (ICU) Ghana which represents the workers of the NIB in matters of employment and non-employment is also quite worried about at the current happening at the bank which has raised much concern, fear and agitation among the workers of the bank.

In brief, the statements by the Minister of Finance, Ken Ofori Atta, and the Governor of the Bank of Ghana, Dr Ernest Addison some months ago suggested the merger of the NIB and the ADB and the non-publication of the 2016-2017 Final Accounts of the NIB, has finally resulted in panic withdrawals by some customers of the bank including quasi-government organizations which are some of the major customers of the bank.

In a letter dated 30th October 2018, signed by the General Secretary of ICU Ghana, Solomon Kotei and addressed to the Minister of Finance said: “We the ICU-Ghana as representatives of the workers of the NIB who are one of the major stakeholders of the bank have written to the Chairman of the Board of Directors of NIB to apprise us with whatever issues that are negatively affecting the organizations of the bank, but the board was economic with the response and implied that the bank was relying on the Minister of Finance and the Governor of Bank of Ghana to determine future of the NIB”.

“In the circumstance, the ICU-Ghana as well as our members who are workers of the NIB are restlessly in limbo as to the fate of NIB, especially with the hindsight of the seven collapsed banks that have been constituted into Consolidated Bank Ghana Limited”, the letter copied to the Bank of Ghana boss added.

Our fears are even heightened as the workers are being kept in the dark by the management of the bank and have been left to speculate as to their future with the NIB, Mr Kotei said his strong worded letter to the finance minister.

“Accordingly, we are hereby appealing to you to kindly make disclosure of whatever that has contributed to the present state of the NIB and the way forward. This will enable us to allay the fears and stem the agitation of our members who are workers of the NIB”.

We believe that coming clear of the issue would be in the best interest of the bank and the workers now and in the future”, the letter said.

Why the collapse of NIB

The Togbe Afede IV-led board did their best to safe the NIB from collapse but they were overpowered by the invisible hands of the government.  It has been alleged that Mr Ofori Atta is refusing to allow NIB recapitalize from several sources.

With two weeks to the Supreme Court judgment in the case NIB between Dominion Corporate Trustees Limited in 2017, Mr Ofori Atta wrote a letter to NIB board asking the board to withdraw the case from the Supreme Court, according to sources.

The NIB won the appeal at the Supreme Court against the Standard Bank Offshore Trust Company Limited, over the payment of US$60 million judgement debt to Dominion Corporate Trustees Limited.

The Court, presided by the Chief Justice, Ms Justice Sophia Akuffo, awarded GH¢500,000.00 cost against the two companies represented by the renowned Ghanaian Economist, and investment consultant, Kwame Pianim.

This Supreme Court victory of NIB attracted more investors to NIB but the Minister of Finance had refused to allow such opportunities for NIB.

Mr Ofori Atta is serving the parochial interest of top NPP elements who wish NIB did not grow as a state bank, the sources alleged.

The revealed that top members of NPP have variously fronted for Dominion against the national interest.

Mr Ofori Atta, in the Supreme Court case which NIB won, prevailed upon NIB board to have negotiated settlement out of court. This the board refused.

To this end, Mr Ofori Atta has used all means to prevent NIB from publishing its accounts for 2016 and 2017.

Panic Withdrawals being used to collapse NIB. State institutions who are depositors are being directed not to do business with NIB, the sources alleged.

African Eye Report

 

 

 

 

 

 

 

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