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ADI berates BoG over lack of credit support to private sector

BY: Ruth Aboagye
Dr Ernest Addison, Governor of Bank of Ghana
Dr Ernest Addison, Governor of Bank of Ghana

The Alliance for Development and Industrialization, (ADI), a Ghanaian think tank, has taken a swipe at the Bank of Ghana demanding of the Governor a clear mandate to the banks to support the private sector.

The Bank of Ghana spent close to GH¢18 billion of tax payers’ money to clean up the banking sector and also provide liquidity support for some banks, a move ADI says merely creates a safe haven for the banks.

According to the ADI, it not too clear what impact the GH¢18 billion clean up exercise has had on the economy. “The banks are not ready to support the private sector, so why should the government use tax payers money to support the banking industry, especially banks that were technically insolvent, due to bad corporate governance and mismanagement”, said ADI in a statement.

“We want the Governor of Bank of Ghana, Dr Ernest Addison to unveil to us what percent of banks’ capital should go to support the private sector. In Nigeria for instance, the Central Bank of Nigeria has come out with a caveat that 50 percent of banks capital should be lend to the private sector. We want the same policy to be replicated here”, according to Francis Mensah, the Convener of ADI.

“You cannot keep taxing the private sector while you are not committed to their agenda. You don’t set rules for the rules to favour one party. We must replicate what the Central Bank of Nigeria is doing to grow our private sector”, the statement said.