From my very own perspective, at the least, Ghana has witnessed three main financial crises throughout the previous eight years that threatened the survival of the sector.
We had the DKM points and different-associated issues as one of many crises. Then additionally, the problems that led to the banking sector clear-up in addition to the Menzgold matter.
I bear in mind when the collapse of DKM, the Jasta Motors and the opposite microfinance took place, plenty of the victims complained of how dangerous they’d been affected by the scenario.
Some misplaced their lives, others misplaced their companies, and others nonetheless suffered all types of troubles – psychological, emotional and bodily torture following their misplaced funding.
Leadership of the nation on the time, underneath the Mahama administration, raised points towards the judgement of a few of these victims for investing in schemes that have been promising outrageous and unrealistic returns on their investments.
As a means of restoring hope and confidence in the sector, the then President John Mahama ordered then Bureau of National Investigations to confiscate properties of DKM Microfinance as authorities rolled out plans to pay clients whose investments had been locked up.
This matter didn’t fade out fully just for the controversy involving gold dealership agency, Menzgold to pop up.
The Chief Executive Officer of Menzgold Ghana Limited, Nana Appiah Mensah, aka NAM1, was accused of allegedly defrauding 16,000 clients of greater than GH¢1.68 billion between January 2017 and September 2018.
He was charged with two counts of abetment to defraud by false pretence and two counts of abetment to hold out banking enterprise with no licence, opposite to Section 6 (1) of the Banks and Specialised Deposit-taking Institutions Act, 2016 (Act 930).
We additionally skilled the banking sector disaster that led to the clear-up by the central financial institution.
This train resulted in the collapse of 9 home banks.
There have been panic withdrawals on the time when the regulator introduced that some banks have been going to be merged whereas the licenses of some financial establishments have been going to be withdrawn.
The panic withdrawals have been meant to take the deposits to secure havens – banks that have been thought of viable, principally overseas-owned.
Presently, Ghanaians are ones extra saddled with one other scenario.
I’m unable to inform whether or not or not it’s a disaster and even whether it is, whether or not it comes close to any of the above-talked about ones.
That is the problem of whether or not there shall be haircut. Also whether or not there may be Debt Restructuring and Debt Exchange. Kindly observe that the federal government has launched the Debt Exchange Programme.
Concerns are that there’s going to be “haircut” on the principal of bonds.
Despite the repeated assurances by the Finance Minister, Ken Ofori-Atta, the President and different authorities communicators that there shall be no haircut, plenty of traders, deep inside them, will not be happy with the reassurance.
At round 6PM Monday, December 5, as an investor who’s at the moment enterprise an funding with one of many banks, I known as my banker, (title withheld) to hunt additional assurances from him whether or not my funding was secure.
This was regardless of having adopted and monitored keenly the conversations, assurances, feedback by the Finance Minister that there shall be no haircut.
My banker himself was uncertain whether or not my funding was secure.
He cautiously defined to me that a few of these funds are invested in authorities’s bonds and so if the federal government’s bond goes to be affected, not directly, I could also be additionally affected.
It dawned on me to name him when a colleague at work and I had a dialog in the early hours of Monday, December 5 about how others have been complaining about challenges with their investments.
Some have began withdrawing from their investments or have even suspended it. Others are additionally considering doing similar.
This has led to the Minister of Finance to attraction to them, saying “there is no need to rush for their monies”.
In my view, given the delicate nature of the sector we’re coping with, and with the advantages of expertise concerning the previous crises in the sector, one would have thought that the federal government would have completed intensive sensitization and engagements means in advance earlier than saying this Programme.
As we communicate, lots of people are uncertain whether or not or to not go for his or her monies.
They are uneasy however all of us do know a fundamental precept in finance that “uncertainty has no room in the financial sector”, as one economics professor mentioned. Because if it does, it creates a significant setback for business gamers.
It is refreshing that authorities has mentioned there may be going to be fixed engagement on the Debt Exchange Programme.
Until then, in order to revive the arrogance, all the foremost points which have come must be handled promptly.
The author is a Ghanaian journalist