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Ensure NIB is recapitalized, or else its collapsed will be blamed on gov't — Prof. Gatsi tells Finance Minister

  Fri, 17 Nov 2023
Business & Finance Ensure NIB is recapitalized, or else its collapsed will be blamed on gov't — Prof. Gatsi tells Finance Minister
FRI, 17 NOV 2023 LISTEN

Dean of the University of Cape Coast Business School, Prof John Gatsi has told Finance Minister Ken Ofori-Atta that he should ensure that the National Investment Bank (NIB) is recapitalized as was stated in the 2024 budget statement.

Prof Gatsi mentioned the important role that the NIB has played in the development of the country for which it must be supported at all costs to remain in business.

He said the government would be blamed if the bank collapsed.

The government has made a provision of GH¢4 billion to address the liquidity issues of the NIB and other distressed Special Deposit-taking Institutions (SDIs) in the country.

Presenting the 2024 budget statement in Parliament on Wednesday, November 15, the Finance Minister said “Mr. Speaker, the Financial Sector Strengthening Strategy (FSSS), which was developed to mitigate the impact of the GoG debt operation on the financial sector, provides for the design of the Ghana Financial Stability Fund (GFSF) as a programme in the Ministry of Finance.

“It also aims to address outstanding legacy issues following the 2017-2019 financial sector clean-up.

“This Fund offers a solvency window consisting of two distinct sub-funds –namely a US$250 million World Bank supported sub-fund targeted at qualifying banks and SDIs; and a cedi equivalent of US$500 million GoG-funded sub-fund that will help to recapitalise state-owned financial institutions as well as potentially support other indigenously-controlled financial institutions to improve their post-DDEP solvency.”

He added ” Mr. Speaker, in addition, a provision of GH¢4 billion has been made in the 2024 Budget to address National Investment Bank (NIB), distressed SDIs, and other outstanding legacy challenges in the financial”.

Speaking on this issue on the Ghana Tonight show on TV3 Thursday November 16, Prof Gatsi said “It has been on the table for a long time that the Minister should use his office to help capitalize NIB. NIB has long been financing development projects in the country that cut across agriculture, the investment in rubber plantations, they support all kinds of construction in the country so it is supposed to be a strategic bank to foster a lot of developments.

“So this was the expectation long time. But for about four or five years one could not tell why the government decided not to mind NIB. The only important thing that has happened was the continued restructuring that has actually downsized the bank but the real investment that is needed was not coming.”

He added “The bank has been struggling sometimes so if the government now decides to recapitalise it that will be welcome news but there is some noise around the bank to the extent that ADB wanted to merge with that bank and there was a hue and cry.

“So now that the Minister had indicated in the budget that they are going to capitalize the bank, the only thing one could say is that they should be focused and recapitalize the bank if not so, the demise of the bank will be blamed on the government.”

-3news.com

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