Ghana Opposition Vows Banking Overhaul Review as Vote Nears

ACCRA (Capital Markets in Africa) – Ghana’s main opposition pledged to review the central bank’s overhaul of the financial sector if the party wins December’s elections, saying the cleanup was unnecessarily drastic and expensive.

Announcing the National Democratic Congress’s main economic policies to reporters in Accra on Thursday, ex-President John Mahama said some of the banks and second-tier lenders that were closed during the cleanup could be resuscitated. This will help depositors access locked-in funds sooner and reduce the amount of funding needed for bailouts.

The government of President Nana Akufo-Addo has approved a total of about 16.4 billion cedis ($3 billion) since August 2017 to recapitalize the industry and safeguard deposits after the central bank revoked the licenses of nine insolvent lenders and 23 second-tier institutions. This figure may escalate to 20 billion cedis as the government weighs whether to increase the guaranteed payback for some depositors, Finance Minister Ken Ofori-Atta said earlier this month.

The cost of the bailout may escalate to 28 billion cedis, Mahama said, without elaborating further.

Mahama is likely to contest the race for the presidency against Akufo-Addo of the New Patriotic Party for a third time, with Mahama enjoying a first victory in 2012 before being beaten four years later. The two parties are dominating politics in one of Africa’s most competitive democracies, where there has been a change in power every eight years since 1992.

Akufo-Addo has already indicated that he wants to run again, and is unlikely to be challenged at his party’s nomination contest that is scheduled for the second quarter.

Source: Bloomberg Business News