On the Liquidation of Capital/UT Banks: Minority MPs want answers from Ken Ofori-Atta

The leadership of the Minority National Democratic Congress (NDC) in Parliament has written to the Finance Minister, Ken Ofori-Atta requesting further information on some outstanding issues necessary for the effective running of the economy.

The Letter which was signed by the Minority Leader, Haruna Iddrisu and the Ranking Member on the Finance Committee, Cassiel Ato Forson, broached the subject of the liquidation of the Capital and UT Banks, cut-off rules in end of 2016 debt service amount and adjustment of the 2016 arrears by GHC 7 Billion.

According to the letter, the Minority had the impression that the GCB Bank was going to absorb the cost of liquidation of the Capital and UT Banks as well as takeover their assets. However, information available to them indicate that the Ghanaian tax payer will bear the cost of the liquidation through the issuance of a GHC 1.6 Million bond.

“We urge you, Hon. Minister and Governor, to respond immediately and explain the entire circumstances of the liquidation to Ghanaians, who will be forced to bear the brunt of the liquidation. This is contrary to the perception that the GCB Bank will absorb the loss as well as the policy prescription in the advanced countries where the burden of these costs are now to be put on shareholders and investors,” it noted.

With regards to the debt service amount, the Minority expressed surprise that the Governor would go against its own strict adherence to the accounting rules and reopen the books for adjustments to be effected without posting any notice. They pointed out an indiscriminate shift from the Cash Accounting rules that applied to weekends and public holidays to Accrual Accounting, and therefore a significant change in the Public Financial Management Policy.

“We note that it is over two months since the 2018 Budget was read. We also observe that the Minister did not pronounce on the implications of the rule change and he has not done so to date. The Governor has also not pronounced on the matter in presenting MPC reports to Ghanaians. Therefore, we wish to make a formal request on the matter to the Hon. Minister and the Governor, to appraise the Minority of the full implications of the rule change.”

The letter further called on the government to make public the outcome of the audits of the end of year exit figures of deficit and arrears of the Mahama led administration at the end of the Fiscal year 2016. In the view of the Minority, the adjustment of end-2016 arrears by GHC 7 billion resulted in a significant increase in the deficit to 10.9 percent as reported by the Finance Ministry in the Mid-Year Fiscal Policy Review of the 2017 Budget Statement and Economic Policy.

However, the Minority contends that, recently, Vice President Dr Mahamudu Bawumia noted at the New Year School that the amount was actually GHC 3.1 Billion instead of the initial GHC 7 Billion; an amount that is also lower than the GHC 5 Billion that the Minister cited in the 2017 Mid-Year Review Statement.

Meanwhile, at the same New Year School, the Vice President stated that the deficit for 2016 was still 10.9 percent on commitment basis.

“As we noted, in response to the Vice President, the lower figure of GHC 3.1 Billion should result in a lower deficit for end -2016. In fact, the deficit is also expected to be lower from savings arising from the audit of these contracts as the Mahama Administration did after the audit of BDC forex loss and subsidy claims; payroll audit; and potentially the audit of Forex provisions in domestic contracts. We stand by our position that the outcome of these audits (i.e. the earlier NDC final drafts or the recent ones by the NPP) must be made public,” it said.

In an interview with the media, Ato Forson explained that the Minority had to make the request for these technical information from the managers of the economy in order to be clear about the economic figures in the interest of building a solid economy for all.

He said should the Finance Minister fail to comply with their request for the information, they will consider hauling the Minister before Parliament for the answers they need.

Source: Clement Akoloh || afriwakeradio.com

 

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