-After Akufo Addo borrows 170 million To Set Up New Bank
The state-owned National Investment Bank (NIB) is planning to lay off a whopping 500 of its staff and has asked them to voluntarily resign in return for an unknown severance package.
An investigation by Whatsup News revealed that on Friday, July 2, 2021, Management of the bank met hundreds of its staff at the bank’s headquarters and broke the bad news to them, saying they would need 500 of them to resign voluntarily or risked being sacked without a requisite severance package.
The shocked staff were stunned by the news as the meeting turned morbid.
No specific reason has been attributed to this radical step by the bank, but Whatsup News is gathering that is due to the financial distress that the bank is undergoing as the Akufo Addo administration’s excessive borrowing and refusal to recapitalise the bank gradually snuff the life out of it.
In the past five years, the struggling NIB has not been able to declare a profit, although it was financially buoyant before that.
The bank’s abysmal performance is such that government agencies have reportedly moved their funds out of the bank in an alleged orchestrated by the Akufo Addo government to further strangle the bank.
Incidentally, the latest development at the state-owned bank is coming a few weeks after President Akufo Addo had jumped on a US$15,000-an-hour private jet to go cap-in-hand for a loan of US$170 million from the European Union so he can set up a so-called Development Bank in Ghana.
The inexplicable move by the Akufo Addo administration has thoroughly irked critics who question the rationale of abandoning existing state banks only to go borrow money to set up another bank.
Besides, the government had caused some banks to be liquidated for using borrowed funds to recapitalize themselves before the recent banking sector cleanup. Banks such as the Heritage Bank were closed down for their low capitalisation and the fact that they were sourcing credit to recapitalize themselves.
Meanwhile, the predicament of NIB is being linked to the direct actions of Finance Minister, Ken Ofori-Atta, who in 2017 planned to pay a whopping US$ 60 million to a foreign company called Dominion Corporate Trustees which had dragged NIB to court after a promissory notes transaction with the bank went sour.
A high court had earlier ruled against NIB to pay a judgment debt and the government led by Mr. Ofori-Atta were readying themselves to settle the money but the board of NIB insisted on pursuing the case further in the Supreme Court.
Eventually, in June 2017, the Supreme Court unanimously ruled against Dominion Group, saving NIB the amount that had been planned to settle Dominion.
Sources within the NIB board had told Whatsup News that two weeks before the case was expected to be heard in the Supreme Court, the Finance Minister, Ken Ofori-Atta wrote to the board to withdraw the case and settle the US$ 60 million out of Court. The board is said to have refused and proceeded to win the case in court.
Additionally, NIB has hundreds of investments in various sources, including Nestle Ghana where it has a whopping GHC 450million. These amounts could easily be used to recapitalise the ailing bank from collapsing. The Finance Minister is reportedly refusing to draw on these assets to save the bank.
Also, reports have it that the Finance Minister had partly been responsible for withholding the balance sheet of the bank for 2016 and 2017 from being published.
Earlier, the Akufo Addo administration had mooted the idea of merging NIB with the other state-owned Agriculture Development Bank (ADB), but that attempt fell through.
Questions sent to the Finance Ministry several years ago by Whatsup News for clarity on the situation in the bank have not been answered to date.
A couple of years ago, the Industrial and Commercial Union of workers at the bank (ICU) wrote a letter to the government to explain why it was running the bank down. According to the ICU in their letter, its members working at the bank suspected something was not right and had written to the Board which comprises mostly representatives appointed by the government, “but the Board was economical with its response and implied that the Bank was relying on the Honourable Minister of Finance and Economic Planning and the Governor of the Bank of Ghana to determine the future of NIB,” the ICU explained.