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President Instructs Finance Ministry to Pay GH¢1.5 Billion to Customers of Defunct Financial Institution But the Allocation Looks Inadequate

President Akufo Addo instructs Finance Ministry to customers of defunct financial institutions but the amount appears inadequate

President Akufo-Addo has instructed the Finance Ministry to disburse GH¢1.5 billion to assist customers affected by the banking sector clean-up operation. However, concerns arise that this amount may not be sufficient to cover the significant funds locked up in just one of the affected institutions.

Finance Minister Dr. Mohammed Amin Adam announced the directive during a UK Town Hall meeting over the weekend. He highlighted that the disbursement, mandated by the President, is slated to be completed between now and October. Dr. Amin Adam underscored the government’s commitment to prioritizing the welfare of Ghanaian citizens, emphasizing that individuals are responsible for their investment decisions, not the government.

Checks by The Accra Times reveal that the amount mentioned by the Finance Minister is part of a GH¢4 billion provision outlined in the 2024 budget. Out of this sum, GH¢2.3 billion is earmarked for injection into the National Investment Bank, leaving GH¢1.7 billion for distressed financial institutions and other legacy challenges in the financial sector. Analysts suggest that the allocated amount may only cover a fraction of the outstanding funds owed to customers.

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The financial sector clean-up exercise, initiated by the government between 2017 and 2018, resulted in the revocation of licenses for numerous institutions, leading to job losses and significant financial disruptions. While customers of some institutions received payments, others are still awaiting resolution of their claims.

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The announcement of the GH¢1.5 billion disbursement has sparked mixed reactions, with Dr. Amin Adam acknowledging government’s compassion amidst challenges faced by affected individuals. He noted, “Ideally, government should not shoulder the investment decisions of individuals, but this administration is committed to addressing the suffering caused. Mistakes were made due to lack of information and advice.”

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Additionally, the Finance Minister confirmed the successful conclusion of Ghana’s debt restructuring program with official creditors and Eurobond holders. He reported restructuring debts amounting to $5.1 billion and $13.1 billion, respectively, marking significant milestones in Ghana’s fiscal management.

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