Former Finance Minister Mohammed Amin Adam has expressed concern over the Court of Appeal’s decision to direct the restoration of GN Savings and Loans' operating licence. He warned the ruling could affect confidence in Ghana’s banking regulatory system and create significant consequences for the financial sector.
This concern stems from the court's recent order requiring the Bank of Ghana (BoG), the country's central bank, to reinstate the licence of GN Savings and Loans. The decision has reopened discussions surrounding Ghana’s financial sector clean-up programme, which took place between 2017 and 2019.
Ghana undertook a broad clean-up of its financial sector during this period, collapsing several banks and microfinance institutions. The BoG aimed to address serious weaknesses in governance, capital adequacy, liquidity management, and risk controls within these institutions. The primary objective was to restore public trust and strengthen the country's financial system after systemic failures. This involved revoking the licences of nine universal banks, 347 microfinance institutions, and 15 savings and loans companies, among others. The exercise cost the government GHS 21 billion.
Dr. Amin Adam, in a social media post, criticized attempts by some government officials to link the court ruling to former President John Dramani Mahama. He described such claims as “disturbing” and urged the public to focus on the judgment's broader implications. He stressed that the issue should be viewed primarily from the perspective of financial stability and regulatory integrity.
The former minister cautioned that reversing regulatory decisions years after licences were revoked could raise questions about the finality of actions taken by the central bank. He argued this might create uncertainty and suggest that regulatory sanctions can be challenged long after being enforced. Such developments could encourage other institutions, sanctioned or collapsed during the clean-up, to seek similar outcomes through legal channels. In his view, this could weaken discipline within the banking sector, making it harder for the BoG to enforce its rules.
Dr. Amin Adam also highlighted that if regulatory actions are perceived as easily reversible, the authority of the Bank of Ghana could be undermined. He said such perceptions could affect trust among investors, financial institutions, and other market participants. He believes effective banking regulation relies on consistency, predictability, and confidence in supervisory decisions, especially regarding licence revocations on prudential grounds. Prudential grounds refer to decisions made to protect the stability of the financial system. Uncertainty regarding regulatory enforcement could have wider implications for investor confidence and overall financial sector stability.
He called for caution in interpreting the court’s decision and urged the Bank of Ghana to clearly communicate its next steps. Dr. Amin Adam emphasized the need to preserve strong, rules-based oversight to protect the gains from past financial sector reforms. He warned, “Ghana cannot afford to politicize banking regulation just as it exits an IMF program. Financial stability is not a campaign promise. It is a national asset.”