Government has secured the funds that the Bank of Ghana (BoG) requested to be able to clean up the operations of Non-Bank Financial Institutions, to make them more solid to support economic growth meaningfully.
The Minister of Finance, Ken Ofori-Atta, disclosed that they recently ring-fenced GH¢700 million in an escrow account, pending the completion of some logistical arrangements to allow for the actual clean up exercise to begin.
Mr Ofori-Atta said the Ministry is ready for the clean up but the date is yet to be decided. He said the upcoming exercise is a continuation from the banking sector clean up exercise which ended in January this year (2019).
The exercise has been variously praised by both government and the BoG as helping to strengthen the sector and reposition it as a key growth driver.
In April, this year, the BoG Governor, Dr Ernest Addison, said the central bank was ready to extend the exercise to the NBFIs subsector only when the Ministry of Finance had mobilised the required resources to fund the exercise.
The governor said the preliminary estimates showed that it would cost around GH¢700 million to clean up the MFIs.
It is expected that BoG will use the GH¢700 million to protect customer deposits in the event the collapse of an institution similar to what happened under the banking sector clean up exercise.
