Govt’s Voodoo Mathematics of Settling Stranded Microcredit Customers Exposed

The voodoo mathematics of the Akufo Addo administration has been exposed in the latest announcement that it has released GHC3.56 billion in cash to fully settle locked up funds of depositors in the 370 microfinance companies that were collapsed by the government.

Incidentally, President Akufo Addo himself had said early August 2020 that over 98% of all funds of these stranded depositors have been settled.

“All those who had deposits in the banks, all of them, their monies have been refunded… Let me repeat it: All those whose savings were in the banks, all those savings have been refunded and paid to the people” President Akufo Addo told Koforidua-based Sunrise FM. Since then, the Finance Ministry, the receiver of these collapsed institutions and government appointees have corroborated the president’s statement.

A simple calculation will mean if 98% of the funds have been settled by the government, the GHC 3.6 billion announced by the government as the last tranche of the settlement will equal the remaining 2% that is outstanding. Essentially, the government is saying that the total funds locked up in the collapsed microfinance institutions and banks, total over GHC 117 billion or US$ 23 billion.

This amount is almost half of Ghana’s entire GDP!

However, the intrigue gets even more curious, because in December 2019, Finance Minister Ken Ofori Atta went to the Ghanaian Parliament to ask for GHC 15 billion as the total amount needed to settle the stranded customers of the collapsed microfinance institutions.

“In view of the foregoing, and the need to protect the financial sector, Parliament is respectfully requested to consider and approve expenditure of up to Fifteen Billion, Six Hundred Million Ghana Cedis (GH¢15.6 billion) for the bailouts of depositors and investors; and for ensuring that liquidity in the financial system is improved thereby safeguarding the financial sector and the economy. This amount covers all the fiscal interventions in the financial sector starting 2017,” the memo indicated in its conclusion,” said Ken Ofori-Atta in a Memorandum sent to Parliament.

In the memorandum, he claimed the amount needed to settle microfinance and savings and loans customers is GHC 2.43 billion.

It, therefore, raises significant questions about the basis of the latest GHC 3.6 billion released by the Akufo Addo administration and the basis for the entire calculation of the so-called locked up funds.

The serious discrepancies, coupled with accusations from affected customers that the government is engaging in deception, is giving a serious cause to worry about.

The affected customers numbering over 3.3 million people have threatened to vote against the governing New Patriotic Party (NPP) for causing their predicaments. They have composed themselves into what is known as Association of Affected Customers of Savings and Loans institution which insist that the Akufo Addo’s claims of repaying them is “untrue”.

According to Ezekiel Annor, the head of the Association only about 297,000, which is less than 10% of the total number of stranded customers have received their monies.

From 2017, the Akufo Addo administration embarked on a contentious financial sector clean-up that has seen over seven indigenous banks collapsed, and almost 400 non-bank financial institutions closed down for an alleged liquidity issues.

However, critics have pointed out that the government deliberately collapsed these companies, leading to hundreds of thousands of lost jobs and some 3 million people losing their deposits.


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