Dr. Nduom demands GHS 7.1bn debt repayment from Government; appeals for license reinstatement

Dr. Paa Kwesi Nduom has called on the Government to settle a debt of GHS 7.1 billion owed to GN Bank, a defunct financial institution that was closed during the Bank of Ghana’s sweeping financial sector reforms in 2017.

During a recent media briefing, Dr. Nduom argued that a structured repayment plan from the government could revive GN Bank’s financial health, allowing it to repay its creditors and depositors.

The debt in question stems from funds GN Bank advanced to pre-finance various government infrastructure projects. Dr. Nduom maintained that these investments were made with the expectation that loans to the government, seen as low-risk, would be repaid promptly. He suggested that the failure to receive these funds was a significant factor in the bank’s collapse.

GN Bank’s closure was part of a broader regulatory intervention that led to the dissolution of numerous financial entities, including banks, savings and loans companies, microfinance institutions, finance houses, and asset management firms. The clean-up exercise was aimed at restoring stability and confidence in Ghana’s financial sector, which had been plagued by insolvency and poor governance issues.

Dr. Nduom’s plea for the government’s repayment is coupled with a call for the reinstatement of GN Bank’s operating license. He posited that with the debt settled, GN Bank could re-emerge as a viable institution, capable of meeting its obligations to customers and contributing to the broader economy.

The assertion that GN Bank’s collapse was preventable if the government had honored its financial commitments highlights ongoing concerns about the interplay between public sector obligations and private sector stability in Ghana. This case underscores the risks financial institutions face when engaging in substantial lending to government projects, especially in economies where fiscal reliability can be uncertain.