Ghana to Blow GH¢2 Billion on Two Collapsed Banks, But Minority MPs Kick Against it

UT, Capital Bank

March 8, 2018//-Ghana’s government is expected to go to the financial market to raise GH¢2billion to pay debt owed by collapsed UT and Capital banks.

The Minority in Members of Parliament (MPs) who disclosed this said they were not favour of the government going to issue debt securities to pay the debt owed by the banks.

They rather asked the government to provide information on why the two indigenous banks collapse  to general public. Former Deputy Minister of Finance, Casiel Ato Forson who is leading the charge maintained wants the government to tell the taxpayers regarding its decision to take over the liabilities of the two banks.

“If a bank collapses, should the taxpayer pay [for it]?” the Minority Spokesperson on Finance told Joy FM, an Accra-based radio station.

According to him, the Minority would be pursuing the matter to ensure that any decision to clear the debts of UT and Capital banks is duly sanctioned by Parliament.

“What is happening to their assets?” Mr Forson asked of the two collapsed banks, urging the government to take steps to address the Minority’s concerns.

However Chairman of Parliament’s Finance Committee said he is not aware of any decision by the government to use taxpayers’ money to pay the debt.

Dr Mark Assibey-Yeboah admitted that the two banks left huge debts, but he ruled out plans to issue a bond to clear it. Almost a year into the collapse of the two banks, Ghanaians are yet to know what cause the banks collapsed.

Recently, the MP for Bolgatanga Central, Isaac Adongo, asked the government and the Bank of Ghana (BoG) to come clean on the financial impact of the collapse of UT and Capital banks on the taxpayer, explaining that the collapse has so far cost the country GH¢3.4 billion.

Out of the amount, he said, GH¢1.4 billion was used as liquidity support for the failed banks in 2016 prior to their collapse in August, last year, while “the government now intends to issue a bond of GH¢2 billion to pay the GCB Bank for the difference in the valuation of the selected assets and liabilities taken over.”

GCB Bank was chosen among three interested banks to take over select assets and liabilities of UT and Capital banks through a purchase and assumption (P&A) agreement signed between the largely state-owned lender and the central bank.

“This GH¢3.4 billion is to be borne by the taxpayer and it is three times the budget of the Free SHS programme for the first year. Yet neither the Minister of Finance nor the BoG Governor is telling us about it,” Mr Adongo said at a public lecture in Accra.

 African Eye Report




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