Ghana's Finance Minister, Cassiel Ato Forson, has announced the government lacks the financial capacity to repay funds locked up in collapsed financial institutions. This declaration impacts thousands of customers affected by the country's extensive financial sector clean-up exercise.
Dr. Ato Forson stated the government cannot continue absorbing liabilities from privately managed institutions. He emphasized the government's need to prioritize essential social programmes like school feeding and capitation grants. Paying these locked-up funds would require significant sums of money, which the government does not currently possess.
This situation places further strain on public finances, already facing significant challenges. The government is attempting to stabilize the economy and maintain fiscal discipline. Previous efforts to compensate depositors have cost billions of GHS, but many customers of fund management companies remain unpaid.
Minister Ato Forson questioned, "Am I going to stop paying for school feeding? Am I going to stop paying capitation grant?" He made these remarks during an interview on Joy News. His comments have drawn disappointment from affected customers.
The financial sector clean-up began in 2017 under the previous Akufo-Addo administration. It aimed to restore confidence and stability in the financial sector. The Bank of Ghana initiated the exercise due to poor management, insolvency, and regulatory breaches among several institutions. This led to the closure of banks, savings and loans companies, microfinance institutions, and fund management firms. Many customers, particularly those linked to fund management companies, have not yet retrieved their investments.
The current government, led by the National Democratic Congress (NDC), had promised to reimburse victims. President John Dramani Mahama pledged compensation within the first year of an NDC administration ahead of the 2024 general election. However, 16 months since the NDC returned to power, affected customers report no clear repayment roadmap.
Charles Nyame, Convener of the Aggrieved Customers of Gold Coast Fund Management, accused the government of abandoning its campaign promises. His group has threatened new protests if the upcoming mid-year budget review does not include provisions for compensation. This ongoing issue creates political pressure for the government.
Stakeholders will closely watch the government’s approach to this unresolved financial liability. The upcoming mid-year budget review will be a key opportunity for the government to address these concerns. Any decision will directly impact public perception and investor confidence.