Ghana is set to spend KSh93.7 billion ($937 million) to refund depositors whose money is being held in failed banks and micro-credit institutions. In 2018, Ghana suffered a banking crisis whereby five banks were merged to form one bank due to insolvency problems.
Because of the laxity in our regulatory framework, it was not right in all conscience to punish customers who are depositor in the system. Micro-finance institutions were meant to be places where only small amounts of money were kept and yet at some places, large sums of money were taken there in breach of the regulations.
Ghana’s President, Akufo-Addo
Previously, the government had pledged to give KSh45 billion ($450 million), as well as issue bonds worth $2.4 billion to support the clients of nine first-tier banks that were liquidated.
However, Bloomberg reports that as a result of the bailouts, the International Monetary Fund estimates the country’s debt rose to 63% of gross domestic product by the end of 2019, from 59% the year before.
In 2019, the Central Bank of Ghana revoked licenses of seven banks and over 20 micro and saving and loan companies, after they were deemed insolvent.
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