Banking cleanup badly affected NPP; touching individual bondholders is dangerous – NPP MP

Finance Minister, Ken Ofori Atta

The financial sector cleanup that was undertaken by the Bank of Ghana (BoG) in collaboration with the Ministry of Finance which resulted in the collapse of nine domestic banks and several Microfinance companies, badly affected the governing New Patriotic Party (NPP) in the 2020 general elections, Member of Parliament for Okaikwei Central, Patrick Yaw Boamah, has said.

He noted that the exercise negatively affected the middle class in the country, a constituency the NPP controls therefore most of these affected persons voted against the party.

He explained that if the government goes ahead to touch individual bondholders under the Domestic Debt Exchange programme, the NPP will suffer badly in the next general elections.

Speaking exclusively to TV3’s Komla Kluste on Monday, January 23, the vice chairman of the Finance Committee said “I am not an advisor to the Finance Minister, he has advisors so I cannot proffer alternatives or say that you could do A, instead of B.  He has the full knowledge of facts of the state of our financing and our economy and with the support of his technical advisors, he will be able to make a firm determination as to where and what he wants to take this country to.

“For me, the answer is simple,  even with DKM and God is Love, we saw what happened to the NDC and other individuals within that small space. The banking sector cleanup or financial sector cleanup affected [NPP] in a bad way in the 2020 elections. NPP prides itself on having a strong base within the middle class, which was the class that the cleanup affected.

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“If you are saying you are going to affect individual bondholders then it means you are putting the party at a higher risk of losing the 2024 general elections because when it comes to people’s savings and investments they don’t look right, they don’t look left, they look for who is going to save them and one promise by somebody can who can’t even honour it, they will take solace in that person.

“So it is a very dangerous curve but I am happy that the Minister says he is going back for further consultations. I pray he comes back and says that  I am not touching it, same with Pensions Funds, otherwise the party and the government will suffer dearly because of this singular policy.

“I represent a business constituency, that is the hub of business, they will invest, they will trade here, they go around Kumasi and Accra, everybody puts money here and there, T-Bills, bonds and, they call you, they ask questions. Do you think those people will be happy with the party come 2024 if this decision is made? I pray that it doesn’t happen.”

The Finance Minister Ken Ofori-Atta after the meeting, also said his Ministry expects the joint technical committee to finish its work by 30 January.

Speaking to journalists in Accra on Wednesday, January 18 after a crunch meeting with the bondholders under the umbrella body Ghana Individual Bondholders Forum (IBF) on Wednesday, January 18, he said “I think the clarity for all of us is that it is a voluntary programme. We have anticipated maybe getting up to 80 per cent which will still put us under the parameter, so we are asking everybody to really join.

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“The Forum reiterated their concerns which are legitimate concerns for all individuals and for the country at large. In the same way, in which we met members of the Pensions group, we set up a technical committee and they will be meeting immediately [Thursday, January 19], we don’t want to miss the deadline that we have set. We are confident that we will get there.

“The clarity for all of us is that it is a voluntary programme, we have anticipated getting up to 80 per cent which will still put us in the parameter so we are asking everybody to join.

“The government continues to be a government that cares for people, lives and livelihoods as we saw in Covid, we protected and going forward too we will protect but also ensure the Community of the Republic crosses the Jordan safely, that is the challenge we have.”

The Individual Bonholders Forum had petitioned the Minister to be excluded from the Programme, which has been scheduled to be rolled out after Tuesday, January 31.

They claimed they have not been adequately engaged by the government in an attempt to include their bonds in the Programme.

They accused the government of short-changing them especially as the Programme comes at a time a promise was made there will no haircuts to such investments.

By Laud Nartey||Ghana