Mahama must educate himself on banking sector clean-up before he speaks - Bawumia

The flagbearer of the New Patriotic Party (NPP), Dr Mahamudu Bawumia, has criticised John Dramani Mahama, the flagbearer of the National Democratic Congress (NDC), over his pledge to restore the licences of financial institutions that collapsed under the current government.

Mahama made this promise during the launch of the NDC's manifesto in Winneba, asserting that the NPP government had unjustly shut down these institutions.

However, Dr Bawumia, speaking during a media engagement, expressed surprise at Mahama's stance, arguing that the NPP's intervention was crucial in safeguarding the deposits of 4.6 million bank customers who would have otherwise lost their funds. He explained that many of the affected banks had engaged in egregious practices, including extending loans far beyond legal limits, misusing capital, and investing in private properties.

“The banking sector was on the brink of collapse,” Dr Bawumia stated, highlighting that the merger of some banks was necessary to prevent a systemic crisis. He advised Mahama to acquaint himself with the reports from the Receiver and the Bank of Ghana (BoG) before making further comments on the matter.

Dr Bawumia elaborated on the gravity of the situation, noting that the BoG had provided significant financial assistance to some banks in an attempt to stabilise them. However, rather than resolving their issues, some institutions misused the funds, exacerbating their problems. He recounted instances where funds meant for rescuing struggling banks were diverted to set up new ventures, which also failed.

“This was one of my nightmares in the last eight years,” Dr Bawumia remarked, underscoring how close the country was to a total collapse of the banking system. He reiterated that the NPP government's actions were aimed at saving millions of depositors from losing their hard-earned money.

Dr Bawumia questioned whether Mahama had thoroughly understood the complexities of the banking sector before making his promise. He cautioned that restoring the licences of the collapsed banks would not be a simple matter, as it would involve legal procedures that could not be overlooked.

Dr Bawumia's comments reflect the ongoing tension between the NPP and NDC as they prepare for the upcoming elections, with both parties offering contrasting views on how best to manage the nation's economy.