A letter to Finance Minister Dr. Cassiel Ato Forson

The banking sector clean-up exercise in Ghana, initiated by the Bank of Ghana (BoG) between 2017 and 2019, was a rushed exercise without considering investors. The process left many investors, including depositors and shareholders, grappling with significant financial losses. While the previous government made efforts to reimburse affected parties, the question of settling these investors with interest remains a critical issue. Here’s why this step is not only fair but also essential for Ghana’s economic and social fabric.

The clean-up exercise, eroded trust in the financial system. Many investors, both local and international, suffered losses due to the revocation of licenses of insolvent financial institutions. Settling these investors with interest would send a strong signal that Ghana values and protects investments, thereby restoring confidence in the financial sector. This move could attract more investments, which are crucial for economic growth.

Legally, investors entered into agreements with financial institutions under the assumption that their funds were secure. While the collapse of these institutions was beyond their control, the government’s intervention to safeguard the financial system implies a moral and legal responsibility to ensure that investors are not left worse off. Paying interest on their claims would demonstrate a commitment to fairness and justice.

Economically, reimbursing investors with interest would inject liquidity into the economy. Many of these investors are businesses and individuals who could reinvest the funds into productive ventures, thereby stimulating economic activity. This could lead to job creation, increased consumer spending, and overall economic growth.

The clean-up exercise, while necessary raised concerns among potential investors about the safety of investing in Ghana. By settling claims with interest, Ghana can rebuild its image as a country that prioritizes the welfare of investors and adheres to international best practices.

The financial losses suffered by investors have had ripple effects on households, businesses and communities. Many individuals lost their life savings, leading to financial distress and, in some cases, lives lost. Settling these claims with interest would alleviate some of these distresses and contribute to social stability.

The clean-up exercise came at a significant cost to investors. Settling these investors with interest is not just a financial obligation but a moral imperative. It would restore confidence, stimulate economic growth, and enhance Ghana’s reputation on the global stage. As the country moves forward in its reset agenda, prioritizing the welfare of its investors will be key to building a resilient and inclusive financial system.

By Yandam Ariel L. Sillim. Investment expert and welfare expert@ the Norwegian Labour and Welfare Administration (NAV).