Economist Dr. John Kwakye has joined the growing calls for the incoming government to revive local banks that were collapsed six years ago. Dr. Kwakye, Head of Research at the Institute of Economic Affairs, believes that with better management and governance structures, these indigenous banks could become viable again.
In a social media post, Dr. Kwakye described the 2018 banking sector cleanup, which led to the withdrawal of licenses from many banks, as the “de-indigenisation of the banking sector” and urged for a reversal of this decision. He argued, “The 2018 banking sector cleanup decimated local ownership of the sector. This was a big mistake. The new government must reverse the de-indigenisation of the banking sector that occurred in 2018.”
The cleanup process, which aimed to strengthen Ghana’s financial sector, primarily affected indigenous banks, leading to job losses for thousands of employees. Former staff of these collapsed institutions have also echoed similar sentiments, calling for a revival of the banks.
Other financial sector experts have suggested that a thorough appraisal of the collapsed banks be conducted to identify those with the potential to recover. Dr. Daniel Seddoh, a former head of the National Pensions Regulatory Authority, earlier proposed that after evaluating these institutions, the government should consider engaging customers with locked funds, possibly waiving part of their investments while converting the rest into equity in potentially viable banks.
Dr. Seddoh emphasized that reviving certain financial institutions with good prospects would not only create job opportunities but also restore public confidence in the financial sector. He urged the government to proactively engage with customers and support institutions that can be restored.
With just four days remaining before the John Mahama-led government assumes office, many are keen to see how these calls for reviving collapsed indigenous banks will be addressed.
