A professor of accounting and finance at the University of Professional Studies, (UPSA) Isaac Boadi, has said the banking sector clean-up was in favour of Ghanaian banks and financial institutions.
According to him, if the National Democratic Congress (NDC) had won the 2016 elections, the banking sector would have completely collapsed because the cleanup would not have happened.
“Let me point out here that if the NDC had won the 2016 elections and they were not going to implement the cleanup as was done by this government, the banking sector would have collapsed completely,” he was quoted by asaaseradio.com.
Prof. Boadi noted that the notion that the banks needed some financial assistance was neither here nor there because the banks were given some financial assistance but that did not amount to any improvement.
“The banks were supported by the central bank. They were given funds to resuscitate their operations and become profitable, but at the end of the day, those monies were misused. UniBank for instance was given GH¢6.1 billion, Beige Bank also got GH¢3.2 billion, UT Bank was a beneficiary of some GH¢860 million, yet they failed to live up to expectations,” he added.
The issues, he explained, were poor corporate governance, false financial reporting, and insider dealings.
“Some of the banks gave loans to some of the clients without collaterals. Some owners gave themselves loans without due process, and all these worked against those banks and needed to be rescued by the government lest they would have crumbled, causing much devastation than we have seen when the cleanup was undertaken,” he also said.
He, however, added that even though the sector is not out of the woods yet, it is in a better shape than it was before the cleanup.
“Per what we have perused, per what we have seen, the banking sector is better off today than it used to be in 2015/2016. It might not be that all the indicators are pointing in the right direction, but most of them are positive and that’s a good thing. This government saved the banking sector and they didn’t collapse it,” he indicated.
Source: Ghanaweb
