Eric Nana Nipah, Receiver for the defunct 347 Microfinance Companies and 23 Savings and Loans Companies and Finance Houses, has assured a hundred percent payment of depositor claims by end of July.
This proves a lot of progress has been chalked in that regard as Mr Nipah says about 96 percent of all validated depositor claims which stands at GHC5.4 billion have been settled. He went on to indicate that prosecutions will also commence next month (August), since government is not only interested in recovering assets and paying depositors.
The Receiver indicated that his outfit has been working with the Economic and Organized Crime Office, EOCO, on potential recoveries and prosecutions for close to a year now. He stated dockets are being prepared to be passed on to the AG’s department for prosecution beginning August this year.
The financial sector clean-up embarked on by government in August 2017 led to the collapse of nine universal banks and 347 microfinance companies with many depositors left troubled and unsure what would happen to their monies.
Consequently, Bank of Ghana also revoked the licenses of twenty-three (23) insolvent savings and loans companies and finance houses, whiles the Securities and Exchange Commission revoked the licenses of over 50 Fund Management Companies.
This was pursuant to Section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the Bank of Ghana to revoke the license of a Bank or Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana determines that the institution is insolvent.
The central bank has maintained that the clean-up has helped to protect depositors’ funds and instilled confidence in the Ghanaian banking sector. We are pleased to learn that not only are depositors’ monies safe but that the culprits whose actions and inactions led to the insolvency of the financial institutions are to face justice soon.
Finance Minister, Ken Ofori Atta while presenting the 2020 budget said the government will soon prosecute individuals whose actions led to the banking crisis and true to their word, prosecutions are set to commence in the not-too-distant future.
Conservative estimates put the loss of direct jobs as a result of the financial sector clean-up to over 6000, and it is only fair that those who superintended the collapse face the law coupled with the huge cost of the financial sector clean-up.
Scale up investment in agriculture to avert food insecurity
Twenty-three years ago, African heads of state meeting in Mozambique made what was then billed as one of the most iconic declarations to help the continent put a stop the eclectic hunger by halting the food insecurity cycle.
Prominent among them was the “commitment to the allocation of at least 10 percent of national budgetary resources to agriculture and rural development policy implementation within five years.
Sadly, only a fraction of African nations has actually met that resolve. Amid coronavirus food insecurity concerns, the Peasant Farmers Association of Ghana (PFAG) has issued a statement saying investment in agriculture offers the surest way to revive the economy as majority of Ghanaians draw their livelihood from the sector.
And as Finance Minister, Ken Ofori-Atta presents the mid-year budget review next week, the Association believes the mid-year budget review offers the nation a good opportunity to scale up its budgetary allocation to at least the 10% enshrined in the Comprehensive Africa Agriculture Development Programme (CAADP).
The Association holds the position that over the years, the agricultural sector has been under funded and believes once the virus is contained, the country should not go back to the position where basic food items are not imported.
The Association is also calling for an increase in input subsidy to farmers as well as the curbing of the smuggling of subsidized fertilizers across the country’s borders. The farming association also notes that government’s stimulus package, the Coronavirus Alleviation Programme (CAP) targeted at micro and small enterprises’ registration requirements does not favour smallholder farmers, and consequently, a special stimulus package for farmers should be considered.
Smallholder farmers are facing increased difficulty in accessing credit, markets, agricultural machinery and inputs among others due to the restrictions and disruptions as a result of the COVID preventive measures.
This situation might lead us to a food and nutrition crisis if immediate remedial actions are not taken to avert them, PFAG states.
Commitment to the sector by African governments has been waning, even as they face some of the greatest threats in history, including changing weather patterns, pests and diseases that are wiping harvests in record time.
Since government’s industrialization drive is anchored on agriculture as the base to feed agro-industries, the advice given by PFAG should be factored in the mid-year review budget next Thursday.