Ghana: Minority MPs to reject GH¢2 billion bailout programme for local banks

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The Minority in Ghana’s Parliament have said it will reject a GH¢2 billion bailout programme for some local banks which failed to recapitalise.

The programme under the Ghana Amalgamated Trust (GAT) Limited, a special purpose vehicle, is an arrangement of private pension funds to inject GH¢2 billion into supporting solvent and well-run indigenous banks, which had difficulties meeting Bank of Ghana’s new minimum capital requirement of GH¢400 million.

The banks include the merged Omni/Sahel Sahara Bank, Universal Merchant Bank, Prudential Bank, as well as two state-owned lenders – Agriculture Development Bank (ADB) and National Investment Bank (NIB).

Parliament is expected to give GAT a sovereign guarantee in order to raise the GH¢2 billion required to bailout the five banks.

Speaking to the media in Accra on the issue, Deputy Minority Leader, James Klutse Avedzi, argued that GAT is an illegal entity and that the minority will reject the approval of sovereign guarantee for it to raise the GH¢2 billion.

“We don’t know what is GAT. Ghana Amalgamated Trust Limited, is it a company? Established by who? Parliament knows nothing like that. So, why do you introduce a company that is alien to Parliament for Parliament to work for us to give a sovereign guarantee for that company to go and borrow?” he asked.

He continued: “What I mean by Parliament is not aware of is that, before the government can do anything of that nature it must be approved by parliament. Nothing has come to Parliament for approval.

“We have not established or given the authority to the government to establish any company for Ghana, so why do you come to Parliament asking it to give you approval for a company which Parliament has not given approval to.

“We cannot give approval for a company we don’t know anything about to go and borrow. We will not support it,” Mr. Avedzi added.

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