Banking sector would have collapsed if NDC had won the 2016 elections – Finance Expert

A professor of accounting and finance at the University of Professional Studies, UPSA, Isaac Boadi, has stressed that if the National Democratic Congress (NDC) had won the 2016 elections, the banking sector would have completely collapsed.

In a one-on-one interview on GH One TV’s State of Affairs on Monday, 5 August 2024, Professor Boadi stated that there was the strongest possibility of the banking sector collapsing completely if the NDC had won the 2016 elections.

“Let me point out here that if the NDC had won the 2016 elections and they were not going to implement the cleanup as was done by this government, the banking sector would have collapsed completely” he posited.

The Dean of Accounting and Finance at the UPSA indicated that the Quality Assets Review conducted on those affected banks made it imperative for a comprehensive cleanup exercise to be undertaken and that’s what the Akufo-Addo administration did.

He also noted that the argument that the struggling banks needed some GHC9 billion needed to be injected into those banks to rescue them is untenable since the banks had already been supported and that did not change anything.

“The banks were supported by the central bank. They were given funds to resuscitate their operations and become profitable, but at the end of the day, those monies were misused” he said.

“UniBank for instance was given GHC6.1 billion, Beige Bank also got GHC3.2 billion, UT Bank was a beneficiary of some GHC860 million, yet they failed to live up to expectations” he added.

He explained that poor corporate governance, false financial reporting and insider dealings were the infractions and breaches which plagued the affected banks.

“Some of the banks gave loans to some of the clients without collaterals. Some owners gave themselves loans without due process, and all these worked against those banks and needed to be rescued by the government lest they would have crumbled, causing much devastation than we have seen when the cleanup was undertaken” he also said.

On whether the banking sector is resilient now than it was before the cleanup, Professor Isaac Boadi said there may be some teething issues, the sector is better today than it used to be.

“Per what we have perused, per what we have seen, the banking sector is better off today than it used to be in 2015/2016. It might not be that all the indicators are pointing to the right direction, but most of them are in their positives and that’s a good thing. This government saved the banking sector and they didn’t collapse it” he indicated.

Reporting by Wilberforce Asare in Accra

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