Previous govt was aware of banking sector crisis - Bawumia claims

The Vice President of Ghana, Dr Mahamudu Bawumia has said that John Dramani Mahama’s administration was aware of the ills in the banking sector despite his warning through a public lecture.

According to him, there was an asset quality review done in 2015 which revealed the various ills in the country’s banking sector which he spoke about while in opposition but the government then did not pay heed to him.

“The previous government was fully aware that there were problems in the banking sector. In 2015 there was what is called the Asset Quality Review which I spoke about. I said 8 banks in the country were insolvent and may collapse but the government paid deaf ears to what I said," He revealed on Accra-based Peace FM.

He indicated that when the NPP took over the country, the banking sector was sinking and they had to be worked on because most of the banks were set up without capital but rather put money together to prove they are capital worthy so that they could get certified by the Bank of Ghana and when given some liquidity support, such funds will be diverted into other things.

“The banks that were collapsed were set up without capital. What they did was that they put money together, present it to the bank of Ghana to prove they are capital worthy and get certified. After they get the certification, they move the monies for their private businesses.”

He indicated that "these banks were working with Liquidity Support from the government but even with the support, the monies were being misused”.

Dr Bawumia said the government had to come in to save depositors and also streamline the sector to make it better going forward adding that the Bank of Ghana itself has also reviewed its systems and have made things better.