AKUFO-ADDO LAUDS BOG'S RESPONSE TO 'WEAK' UT, CAPITAL BANKS

Akufo-Addo lauds BoG's response to 'weak' UT, Capital banks

Source: Ghana|myjoyonline.com|files
Date: 18th-august-2017 Time:  12:13:39 pm

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President Nana Addo Dankwa Akufo-Addo has praised the Bank of Ghana for "decisively"  withdrawing the license of two severely distressed Ghanaian-owned banks.

The President said the central bank has "demonstrated [the] preparedness" to act in a responsible manner, key to a sanitised and functioning banking sector.

He was speaking at the 60th-anniversary celebration of the bank established in August 1957, five months after Ghana gained independence.

Akufo-Addo stressed weak banks threaten the government's economic growth agenda, encouraging the central bank to "forcefully" address challenges within the sector.

The President said although BoG enjoys operational independence, it must nonetheless cooperate with government to create the enabling environment to attract investment and drive economic growth.

He implored the Central Bank to ensure that its monetary policy roles are not at variance with the government's role in determining fiscal policies in the country. 

He gained applause from the bankers when he revealed, one of government's fiscal policies is to keep the overall fiscal deficit between three to five percent starting 2018.

A lower fiscal deficit increases confidence among domestic and foreign investors. It also bolster the credibility of government to run a country's balance sheet. 

The President also touted government's plans to start a National Digital Property Addressing system for all parcels of land and property as well as rolling out the National ID card system.

The two plans, he said are key to formalising the economy and creating the platform for a boom in mobile financial services.

The last time Ghana was comprehensively mapped was in 1974, according to officials of the Lands Commission, even though such mapping is supposed to be undertaken every five years.

The Land Administration Project (LAP), which began in 2003, has been able to map only 10% of Ghana’s landmass.

A single national ID system is expected to, amongst others, track immunization of children and health care of citizens, issue drivers licenses and passports linked to digital identity registry.

 It is expected to also eliminate ghost names from the civil service payroll, and reduce cost of maintaining multiple Identity databases.

The President also re-stated government's plan to issue a $2.5bn energy bond as a solution to paying off huge debts in the energy sector. 

He said paying off the debts should help provided much-needed liquidity for the banking sector,  create space for investment in the energy sector and also improve balance sheets of distressed players in the sector like GRIDco, Electricity Company of Ghana and Volta River Authority (VRA).

 

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