By: Edzorna Francis Mensah
The Minority has raised a red flag over an attempt by the government to ‘sell’ the National Investment Bank, NIB, to the Agricultural Development Bank, (ADB) over a lack of liquidity to recapitalize.
Explaining the complexity of the matter as it unfolds, the Ranking Member of the Finance Committee in Parliament and the Minority Spokesperson of Finance, Isaac Adongo stated that the Bank of Ghana (BOG) has been extremely complicit in providing its regulatory forbearance to bring NIB to its knees and now in an unethical and opportunistic position to acquire its own regulated entity.
“So, who watches the watchman or protects the interest of NIB? he asked.
In his view “any action relating to NIB that has the potential to benefit BOG is illegal, unethical, and smacks of deliberate opportunistic regulatory conduct.
As if the conflict of interest issues are not enough, their methods also have technical and work flaws”.
According to Mr. Adongo, actions of BoG and the government in respect of NIB only add one more puzzle to “their technical ineptitude. Unless there is an ulterior motive that I may not be aware of or perhaps something taught to only a group of people in Yale and Harvard Business Schools”.
He said, the complexities often introduced into these simple and obviously common sense finance decisions are mind-boggling, and “it looks to many that the government and BoG are deliberately
making things look more complex than they actually are so they can confuse the average Ghanaian and then loot in the process”.
Let’s take a look at these scenarios he proceeds…’ADB is owned by the state through BOG (64%,). GoG (21%), and GAT (11%) making it a total of 96% ADB with the remaining 4% owned by residual retail investors. The same state owns NIB. As shareholders of NIB, you are being asked to bring more money to recapitalize your bank (NIB) but you say you don’t have money to recapitalize it but you turn around to tell one of your banks, ADB, to come and buy your other Bank NIB”.
With the above scenario, Minority concluded that “effectively, you are the ones using your own money to buy a bank that you already own anyway?
So, you collect your own money as consideration for the sale of your own bank to yourself and wake up the next morning pretending you no longer own the bank”.
Isaac Adongo described the issues as “needless complexity, a senseless smokescreen for thievery by Government and BoG acting together”.
He posed another question as to whether “will ADB operate both ADB and NIB on one street competing against itself as going concerns?
He added that collapsing NIB despite its large size, national status, and the systemic effect it could have, possibly led to the wiping off of several viable jobs in a country that are struggling to create jobs for its teaming unemployed youths.
He drew Ken Ofori-Atta’s attention to what he called “legal, technical and regulatory flaws” in his intended actions in relation to NIB and to offer some proposals for him to consider in resolving the issues to produce a strong and vibrant NIB, insulate the sector from further systemic hemorrhage, and restore confidence in the financial sector, retain jobs, and stay compliant with performance obligations to the IMF under the ECF Program.
