With less than four months to the general election, the Akufo-Addo government is showing signs of panic.
Indeed, to many people the opposition National Democratic Congress (NDC) led by John Dramani Mahama is now deciding the direction of government’s decisions, actions and movements.
Yesterday at the NDC’s Townhall meeting at Kumasi in the Ashanti region, Mr. Mahama announced that when he is successful at the 2020 polls, he will pay all customers of the collapsed banks, micro finance companies among others.
Interestingly, he was still in Kumasi making his way to Accra, when the Akufo-Addo government through the receiver, announced a change of mind saying it has released funds to pay all customers.
The customers had been demonstrating across the country demanding their money with some having to spend time in police cells over unlawful protests.
But now, all customers, effective Wednesday, September 16, 2020 will receive cash instead of the earlier promised government backed bonds.
It said the government has decided to convert all of its non interest bearing commercial paper (bonds) into cash at no discount in respect of the payments to affected depositors of the collapsed companies.
It will be recalled that the government had provided a combination of cash and bonds to pay depositors of the collapsed financial institutions, being 347 microfinance and 23 savings and loans companies, and had shut its doors on customers who had raised concerns.
The Receiver, Eric Nana Nipah made the new arrangement of cash payment to all customers known in a press statement issued yesterday, Tuesday evening, [September 15, 2020].
The payment takes immediate effect; today, Wednesday, September 16, 2020 and will be done by the Consolidated Bank of Ghana (CBG).
The new arrangement affects only depositors of the 347 microfinance companies and 23 savings and loans whose claims have been validated in the resolution process.
The Graphic online had reported that Mr Eric Nana Nipah in his statement had explained that the decision became necessary due to concerns raised by affected depositors in relation to the bonds.
“The Depositor Payment Scheme set up by the Receiver/Official Liquidator to administer and fully settle all valid depositor claims in the resolution process has largely been successful; however an area of concern for most of the affected depositors is with the features of the Commercial Paper [Bond] used to partially settle the indebtedness of these resolved companies to those depositors whose claims were not fully extinguished by the payment of cash to them.”
“These depositors have indicated that the features of the Bond, being non-interest bearing and with a tenor of five years do not make the Bond commercially attractive, thus creating a significant loss in value of their claims to them.”
He added that the new arrangement would also provide additional liquidity to the financial sector.
“Government has made available to the Receiver/Official Liquidator additional cash amounting to approximately GHc3.56 billion, equivalent to the total value of the Bond component of funding required to fully satisfy the indebtedness of the resolved entities to their body depositors,” the Receiver’s statement added.
“It is the expectation that this additional cash of approximately GH¢3.56 billion will replace the Commercial Paper which has been issued by government in favour of affected depositors of these companies in resolution.”
Consequently, depositors who have either received or are due Commercial Paper in partial satisfaction of their claims will now receive CASH payments at no discount for the Commercial Paper they have either received or is due to them, the statement explained”Please note that depositors who have already discounted all or part of their Commercial Paper will receive a full refund in cash of the discount they suffered,” it added.
“As a result of this new funding arrangement provided by government, all valid depositor claims in the resolution exercise worth GHc6.49 billion in value are being fully settled in CASH.”
“Notice is hereby given that with effect from Wednesday 16 September 2020, affected depositors may contact any branch of Consolidated Bank Ghana Ltd (CBG) the paying bank to access their newly created Cash accounts which were originally designated as Commercial Paper (Bond) accounts at the bank ie CBG.”
In line with the government’s commitment to protect depositors funds and to shore up public confidence in the financial system, the Bank of Ghana shut down 347 microfinance companies, 23 savings and loans and 39 micro-credit companies by revoking their licenses.
The BoG then appointed Mr. Eric Nana Nipah as Receiver for the specified institutions in line with section 123 (2) of Act 930.
The depositors of the defunct companies were notified of the government’s decision to convert deposits into government backed non interest bearing commercial paper (Bonds).
The government made available to the Receiver of the above resolved companies, as well as the Official Liquidator of the Micro Credit Companies in official liquidation, a combination of cash and Commercial Paper totaling approximately GHc6.49 billion to fully settle the valid depositor claims on these institutions.
As the Receiver/Official Liquidator brings the processing and payment of valid depositor claims to closure, a total amount of approximately GHc6.07 billion has been paid to some depositors of these resolved companies, leaving an amount of approximately GHC402 million to be paid to the remaining depositors, to fully settle all valid depositor claims in theresolution process.
The claims include validated claims previously assessed by the Receiver/Official Liquidator as Late Submission claims owing to the fact that they were submitted after the extended deadline for the submission of depositor claims in the resolution process.
Of the total amount of approximately GHc6.49 billion required to fully settle all valid depositor claims in the resolution process, about GHc3.56 billion of these claims invalue representing approx 55% of total claims payable are being settled with government of Ghana backed Non-Interest bearing Commercial Paper (Bond), with the remainingapproximately 45% in value of claims payable, worth approximately GHc2.93 billion being settled with Cash.
It is the Bond that has now been converted into cash.
Since the NDC manifesto launch, Akufo-Addo government has opened its ears to spare parts dealers and suspended plans to ban the importation of salvage cars in November, because the NDC promised to scrap the law including a tax component.
It has also started engaging Okada operators to legalize their operations because the NDC had promised to do so when it wins the 2020 election.
The government has also suspended the licensure exams for teachers in the country because the NDC had indicated it was going to scrap that too saying medical doctors don’t have to write any licensure exams after their housemanship.
Additionally, the opposition party had also indicated, its plans to pay for the fees of students in private SHS in areas without public schools, and suddenly the Akufo-Addo government called the private school owners into a meeting to discuss how to implement this arrangement.
Previously, the owners have been seeking audience with the government but all doors had been shut on them.
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TheHeraldGhana
