Honorary Vice President of IMANI Africa, Bright Simons
Honorary Vice President of IMANI Africa, Bright Simons has cautioned that some commercial banks operating in Ghana are on the brink of insolvency due to government’s inability to provide adequate protection in the fiscal space.
According to him, these banks are already reeling from the impact of the ongoing challenges
Read full articlein Ghana’s fiscal system which has been in distress for a period.
Addressing participants at the 2022 Baah-Wiredu Memorial Lecture on September 22, Bright Simons explained that government will need more than its estimated sum of US$1 billion to sustain the financial sector.
“The situation is likely to cause catastrophic problems for the economy. Some banks are already on the brink of capital distress, some banks are literally on the brink of insolvency in Ghana now because of the government’s attitude and that of fiscal authorities who do not have money.
“For instance, I do not have the $1 billion that is needed need to fix the problem, I am just going to leave it for now,” he is quoted by Joy Business News.
“We [IMANI Africa] had a run on one or two banks because they keep failing to clear and the word goes out that they are failing and because of that people have started to pull out their monies. We are also seeing that in the investment side too…we know that the $1 billion that the BoG Governor says it is waiting for is not enough,” he added.
Bright Simons further added that asset quality reviews conducted on some commercial banks show their various distressing positions and therefore wants government to critically look into the situation.
“When we did an asset quality review, things that were hidden popped up. Do you remember those days when they announce profits, a large amount and they were winning awards?"
“All of a sudden, we did an asset quality review and things started to become frightening…I think that the government has to be extremely careful,” Bright Simons noted.
Meanwhile, following the banking sector clean-up exercise undertaken by the Bank of Ghana in 2018, government said it has spent about GH¢25 billion in order to safeguard the financial sector from a collapse and save depositors' funds.
Honorary Vice President of IMANI Africa, Bright Simons
