COVID-19: To ease virus’ impact, SEC must act to pay off collapsed investment banks’ customers

The Private Enterprise Federation (PEF) and 19 other business associations have urged government to, as a matter of urgency, pay customers of collapsed investment companies or asset managers to reduce the impact of coronavirus on people’s income.

PEF and the 19 business lobby groups – including the Association of Ghana Industries, Ghana National Chamber of Commerce and Industry and Ghana Chamber of Mines – in a statement on outbreak of the coronavirus and its impact on businesses and Ghanaians at large, urged the Finance Ministry to partner with the Securities and Exchange Commission to ensure that stranded customers of the collapsed Companies/Asset Managers are paid immediately.

This, they argue, will go a long way to provide relief to affected customers and improve the liquidity position of the private sector, as it will boost their limited internally generated funds against the current uncertainties brought about by the coronavirus pandemic – which has so far claimed three lives.

“We request the Ministry of Finance to partner the Securities and Exchange Commission (SEC) to ensure the release of funds to pay customers of collapsed Investment Companies/Asset Managers registered and regulated under SEC whose monies are still locked up with these Investment Companies.

“This move, we believe, will go a long way to improve the liquidity position of the private sector and boost their limited internally generated funds against current uncertainties,” read the statement signed by PEF’s Chief Executive Officer, Nana Osei-Bonsu.

Just as the Bank of Ghana effectively facilitated the release of funds for payment to depositors of collapsed microfinance, microcredit and savings and loans companies, the statement urged the Ministry of Finance and SEC to ensure immediate release of funds to customers of the collapsed investment firms.

On the virus’ impact on private sector, the statement said, indubitably, the outbreak has brought untold hardship to the people of Ghana – especially private sector businesses which are compelled to keep up with staff payrolls, utility costs and other statutory payments despite the fact that major revenue generation activities of these businesses are at a standstill.

While describing actions taken by government to tackle the outbreak as commendable, the statement said the crisis calls for innovative approaches by all stakeholders to allay the hardship experienced by these businesses and the citizenry at large. “PEF and its 19-member Business Associations and Chambers declare our unflinching support to government in the fight against this disease,” the statement noted.

It also commended the Bank of Ghana for putting in place measures to help reduce impacts of the outbreak on credit to the private sector.  The statement mentioned reduction of the policy rate by 150 basis points from 16 to 14.5 percent, the primary reserve requirement from 10 to 8 percent, capital conservation buffer from 3 to 1.5 percent, provisioning for loans in the ‘other loans especially mentioned’ category from 10 to 5 percent, among others, as policy decisions in the right direction.

“Regardless of this undesired COVID-19, the Federation and its members are encouraged by the president’s actions and wish to state that the private sector, as responsible partners in the socio-economic development of our country, will continue to work hand in hand with government to address the situation,” the statement concluded.


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