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“GH¢1.5 Billion Allocation for Defunct Financial Institution Customers Deemed Woefully Inadequate”

Convener of investors with locked up funds say the GH¢1.5 billion allocated to customers of financial institutions affected by the financial sector cleanup is woefully inadequate, urging government to provide more funds

Dr. Adu Anane-Antwi, Convener of the Locked-up Investment Holders Forum has said the GH¢1.5 billion allocated by the government to pay customers of defunct financial institutions is woefully inadequate.

He pointed out that the amount falls short of even covering the locked-up funds in Blackshield Capital, one of the affected institutions following the financial sector cleanup of 2017 and 2018.

In an interview with The Accra Times, Dr. Anane-Antwi urged the government to allocate additional funds in its upcoming 2024 mid-year budget to adequately compensate the numerous affected customers who have endured years of financial hardship.

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Finance Minister Dr. Mohammed Amin Adam announced during a UK Town Hall meeting over the weekend that President Akufo-Addo has instructed the Ministry to disburse GH¢1.5 billion to assist customers affected by the banking sector cleanup.

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However, concerns have been raised that this amount may not suffice to cover the substantial funds still locked up.

The affected customers can be broadly categorised into two groups: those whose licences were revoked, such as Blackshield Capital and First Banc Financial Services, classified as legacy issues in the financial sector; and others who belong to insolvent Specialised Deposit-taking Institutions (SDIs) whose licenses are yet to be revoked, including NDK Financial Services and others.

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Checks by The Accra Times revealed that the GH¢1.5 billion mentioned by the Finance Minister is part of a GH¢4 billion provision outlined in the 2024 budget.

Out of this amount, GH¢2.3 billion is designated for injection into the National Investment Bank, leaving GH¢1.7 billion for the distressed SDIs and other legacy issues in the financial sector.

Dr. Anane-Antwi emphasised that the legacy issues alone exceed the GH¢1.7 billion budgeted amount, citing the amount as insufficient to fully cover the necessary expenses.

“I believe the balance of GH¢1.7 billion, out of which this current GH¢1.5 billion is being released will not be enough to cover even the legacy issues let alone get some balance to cover distressed financial institutions or the distressed Specialised Deposit-taking Institutions so whatever amount was budgeted for is woefully in my view inadequate,” he said.

He added that pensioners with investments in the defunct NDK Financial Services alone amount to over GH¢500 million, underscoring his view that the GH¢1.5 billion allocation is inadequate.

Dr. Anane-Antwi whose group has been picking the Finance Ministry said their protests, held weekly on Wednesdays, will continue, asserting that the analysis of available information shows that the current allocation will not adequately resolve their issues.

He urged the government to clarify who will benefit from the GH¢1.5 billion to avoid giving false hope to investors with locked-up funds. 

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