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The Majority in Parliament has debunked an allegation by the Minority that the government intends to sell off or facilitate the takeover of the National Investment Bank (NIB) by the Agricultural Development Bank (ADB).
It described the allegation as “malicious lies” intended to create the impression as though the government was bent on selling the bank.
The Majority also said it was not true that the treasury of the NIB had gone bankrupt.
On the contrary, it said since 2018 the NIB management team had worked so hard to increase deposits from GH¢3.2 billion in 2019 to GH¢5 billion presently.
Demand for evidence
Addressing the press in Parliament yesterday, the Majority Chief Whip, Frank Annoh-Dompreh, challenged the Minority to provide evidence to justify the allegation of the government’s intent to sell off NIB.
“If the Minority has evidence that there is going to be a sell-off, why don’t they put that in the public?
We want to challenge the Minority that if there is a sinister intention like that, they should come and tell us and save us from a wild goose chase,” he said.
At a press conference on September 28, this year, the Ranking Member on the Finance Committee, Isaac Adongo, expressed the Minority’s stance on the decision by the government and the Bank of Ghana to allow ADB to acquire NIB.
It said instead of the acquisition and the subsequent liquidation of NIB, the government and the BoG must recapitalise NIB to make it more liquid.
It explained that NIB’s biggest challenge was the negative effect of the capitalisation deficit of GH¢2.4 billion.
The Minority, however, said a casual review of NIB’s balance sheet showed that restructuring the books could generate more than GH¢2.75 billion to clean up the GH¢2.4 billion deficit and free shareholders’ funds and equity of about GH¢350 million towards recapitalisation.
However, reacting to the position of the Minority, the Majority Chief Whip said during the era of the previous administration, some GH¢500 million was given to non-financial institutions.
“Most of these loans have not been recovered as of today, and what was done was against the code of ethics of the bank,” Mr Annoh-Dompreh said.
To shore up the liquidity of the bank, he said in 2019 an action led by the Finance Minister obtained a parliamentary approval for GH¢2.2 billion as sovereign guarantee in favour of Ghana Amalgamated Trust (GAT) to recapitalise NIB.
Apart from the sovereign guarantee being given to GAT, he said Mr Ken Ofori-Atta led the effort to raise GH¢857 million which was given to NIB to support its activities and operations.
“I think the government has put in some good effort but it stands to reason that because of the challenges in the financial sector, the bank is still demanding some recapitalisation oxygen so that they will begin to work and remain relevant.
“One of the first calls which we will support is to encourage the Finance Minister to help in pushing more capital to the bank,” he said.
Mr Annoh-Dompreh argued that Ghana Amalgamated Trust’s GH¢857 million that was pushed to NIB obviously had not worked the way it was expected, saying that “more is needed if the bank is to stay more relevant in helping our industry to be strong”.
“If NIB is strong, our One-District-One-Factory will stay relevant and I am sure that most firms that collapsed would not have collapsed,” he said.
Justifying the call for the government to recapitalise NIB, Mr Annoh-Dompreh said NIB’s core mandate of supporting the country’s industrial drive had become more critical in an era of One-District-One-Factory (1D1F) programme.
“What the government should be encouraged and urged to do is to help in the recapitalisation of NIB but not to run it down,” he said.