Mahama Govt To Restore Collapsed Ghanaian Investment In Banks

A future Mahama government will restore Ghanaian investment in the country’s banking sector, the 2020 flagbearer of the opposition National Democratic Congress (NDC) has said.

According to the former President, the restoration will be done through a tiered system that the government has already pencilled down.

“(We will) restore Ghanaian indigenous investment in the banking and financial sector through a tiered banking structure in order to restore viable credit sources for Ghanaian SMEs,” President Mahama said.

He gave the promise at a meeting with organized labour and professional groups at the Ho Technical University on Wednesday. 

The promise comes in the aftermath of the Akufo-Addo government collapsing a number of indigenous banks in what the government has controversially defended as a necessary clean-up exercise.

In total, some 400 banks, savings and loans companies, brokerage firms and non-bank financial institutions were collapsed by the government, resulting in the retrenchment of thousands of workers.

Hiking minimum capital requirement for banks from Ghc120million to Ghc400million, the government had gone after indigenous banks and used their supposed inability to raise the money as the basis to collapse the banks.

Interestingly, many of the banks which had been collapsed were owed billions by the same government which refused to pay them the monies and rather collapsed the banks so these monies would rather be paid directly to customers.

Some angry owners of these banks have dragged the government to court arguing that their banks were deliberately collapsed by the connivance of the government and the central bank.

Dr. Paa Kwesi Nduoum of the Groupe Nduoum bank has called President Akufo-Addo an “enemy” over the targeted closures and vowed to do everything he can to ensure that he also loses the Presidency.

Meanwhile, the promise to stimulate Ghanaian investment again in the banking sector was just one of a plethora of policies that ex-President Mahama has said his government would execute if elected in December 2020 for a second term.

Giving an overture, he said among other things that his government will within one year, pay all the locked up investment of customers of financial institutions collapsed by the Akufo-Addo government.

“(we will) establish a Financial Services Authority that will be responsible for ensuring that consumer financial markets work for consumers, providers and the economy as a whole. 

As part of the plans to stimulate businesses, Mr. Mahama is promising that Small businesses will be exempted completely from corporate income tax, while corporate income tax for medium-size companies will be reduced from the current 25% to 15%.

He also had incentives for newly formed companies, “Newly established medium-size companies that employ staff up to twenty (20) will be completely exempt from the payment of corporate income tax for one year, And newly established medium enterprises that employ more than twenty (20) staff will be exempted completely from the payment of corporate income tax for two years,” the ex-President promised.

He plans to create one million jobs in his new administration.