Government’s decision to pay depositors of defunct financial institutions over 5 years without interest ‘irresponsible’ – PEF boss

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The Chief Executive Officer of the Private Enterprise Federation, Nana Osei Bonsu, has described as an irresponsible offer government’s decision to repay customers of defunct financial institutions with bonds without interests.

In his opinion, government is responsible for the collapse of the financial institutions since they failed to supervise the activities that led to the revocation of their licenses.

He explained that money loses its value over time, therefore, the value of the money of customers now will reduce by the time government pays the amount in full thus, it is only right for government to pay an amount as interest to make up that loss.

Government through the Bank of Ghana and Security and Exchange Commission closed down over 300 financial institutions that included banks, microfinance, finance houses, savings and loans among others.

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To help depositors have their funds back, government has instituted a payment plan where some affected persons who had beyond a certain amount will be paid over a period in bonds.

But the PEF CEO dismissed this approach saying, “…these are people we encouraged to put their monies in licensed institutions. They didn’t go playing POKA with anybody or susu with anybody but in licensed institutions and if these things have happened, you need to pay them their money back.

“You give them a 5-year bond of zero-coupon, what is that value of money? By the time a GHC100 is paid in 5 years, it might be 20 cents.

“It is an irresponsible deal.

“How come you are just going to give a bond of 5 years without a coupon and expect people to accept it? What do you expect them to eat between now and 5 years?”

He made these remarks in reaction to government’s GHC600 million stimulus package announced to help revive businesses.

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In his view, government will better serve the interest of some businesses if it pays back the about GHC8 billion of their funds locked up due to the financial sector clean up suggesting the GHC600 was inadequate to help all affected businesses.

Speaking about how the financial sector mess has affected businesses due to government’s negligence and the need for people to mount more pressure on the government to live up to the billing, Nana Osei Bonsu said, “I think Ghanaians are not angry enough to demand from government the responsibility to pay back the resources that they owe them”

“We should push and much more maybe seek legal action to make sure government lives up to its responsibility, what they have created.

“People that chop the money, where are they. what happened to them? They are riding the Mercedes, and jaguars and Lamborghinis around in style. Go and see in front of the SEC, you will see poor people, you will see sick people coming to SEC to see if they can get their money,” he noted suggesting the pace of trials and investigations be quickened.

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So far, about 5000 businesses in the Micro, Small and Medium-scale sectors have applied for the GHC600 million COVID-19 Alleviation Package set up by government.

The disbursement is been implemented by the National Board for Small Scale Industries.

Affected businesses who wish to apply for the package have been urged to do so via the special purpose website designed by the NBSSI to facilitate the process.

 

SourceABC News

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