27.2 C
Accra

Government Advised to Recapitalise NIB with GH¢1 Billion and Allocate Rest to Pay Locked-Up Funds

Government told to inject GH¢1 billion in NIB in stead of GH¢2.3 to make more money available to pay locked-up investments

Former Director General of the Securities and Exchange Commission, Dr. Adu Anane-Antwi, has advised the government to reconsider its plan to recapitalise the National Investment Bank (NIB) with GH¢2.3 billion.

Instead, he suggests injecting GH¢1 billion, arguing that this amount would adequately address the bank’s capital needs, even if it currently operates with negative capital.

In the 2024 budget, the government allocated GH¢4 billion to resolve challenges in the financial sector. Of this amount, GH¢2.3 billion is earmarked for NIB, while GH¢1.5 billion is intended to compensate customers affected by the financial sector cleanup of 2017 and 2018.

- Advertisement -

However, concerns have been raised that GH¢1.5 billion may not suffice to settle all claims from affected customers.

Join our WhatsApp Channel for more news

Dr. Anane-Antwi, who convenes the Locked-up Investment Holder Forum, emphasised the importance of distributing the remaining funds across the financial sector to restore investor confidence.


Read Also

- Advertisement -

He proposed that by limiting the capital injection into NIB to GH¢1 billion, the government could retain approximately GH¢3 billion to address legacy issues and compensate depositors of insolvent financial institutions whose licences are yet to be evoked.

Expressing concern about the broader implications for the financial sector, Dr. Anane-Antwi cautioned that overcommitting resources to a single bank could exacerbate challenges elsewhere. He stressed the need for a balanced approach that addresses systemic issues affecting the entire sector.

Meanwhile, Finance Minister Dr. Mohammed Amin Adam, in a joint press conference with the International Monetary Fund (IMF) and the Bank of Ghana, announced the government’s commitment to implementing a comprehensive plan to resolve NIB’s insolvency by the end of 2024.

This initiative was a key requirement for securing IMF Board approval for the disbursement of the third tranche of $360 million.

Established under Dr. Kwame Nkrumah’s government in 1963, NIB was Ghana’s first development bank aimed at promoting rapid industrialisation across the economy. Despite its historical significance, the bank has faced considerable challenges in recent years, prompting government initiatives to stabilise it.

Previous plans to merge NIB with the Agricultural Development Bank were abandoned amidst concerns about the potential outcomes for both struggling institutions.

While you're here, we just want to remind you of our commitment to telling the stories that matter the most.Our commitment is to our readers first before anything else.

Our Picks

THE LATEST

INSIDE POLITICS

Get the Stories Right in Your Inbox

OUR PARTNERS

Allafrica.com

MORE NEWS FOR YOU