Banking Crisis: Ghana Not In Recession – CEO

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The Group CEO of CDH Holding, Emmanuel Adu-Sarkodee, has accused the Central Bank of “wrong timing” in sanitizing the banking sector.

As a result, he said the decision has led to the seeming liquidity crunch in the country.

According to him, local banks are the main drivers of the economy because of their support to indigenous businesses therefore the current situation in the banking sector has become injurious to the economy.

“These banks really drive the economy of this country,” he said at a roundtable discussion on the banking crisis organized by the Ghana Bar Association in Koforidua.

He added: “They are the ones who lend Ghc50,000 to the carpenter or the sub-contractor. They place money with finance houses and savings and loans companies to lend to waakye sellers and to the farmer and hairdressers. The banks hold the economy together. However, these types of banks are the ones under pressure now. That is why we are where we are in seemingly liquidity crunch which has affected the country.”

“We are not in recession by any stretch of imagination but anybody would tell you that money is hard to come by and for that, you don’t need PhD in economics to tell you that something is wrong with the system and especially the massive withdrawals that have hit some financial institutions,” Mr. Adu-Sarkodee noted.

According to the CEO, bank deposit has taken a nosedive to its lowest in five years, which is a signal that there are uncertainties in the sector making depositors worried. He noted the Central Bank failed to heed to the saying, “never throw the baby with the bath water.”

Mr. Adu-Sarkodee was of the view that all stakeholders including the BoG and directors of the banks failed to adhere to their fiduciary responsibilities.

He therefore called on the Central Bank to swiftly develop strategies to restore confidence in the banking sector and communicate effectively to the citizenry while building the capacity of the media financial reporting in this emergency times.

He is also proposing that the Public Accounts Committee of Parliament be made responsible for staffing the Boards of Public Banks instead of Government appointing party faithful to insulate the banks from political interference to enable the Boards do independent work.

Mr. Adu-Sarkodie also suggested to the Central Bank to consider appointing two representatives to sit on boards of private banks and deposit taking private institutions to enhance supervision.

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