Financial sector clean-up: Over 6000 direct jobs lost, costing taxpayers over GHC20bn with no convictions so far

Tracking job creation in Ghana

iWatch Africa investigation into the number of direct jobs lost as a result of the Bank of Ghana (BoG) clean-up of the banking and specialized deposit-taking and non-banking financial institutions sectors has revealed that over 6000 people have directly lost their jobs since 2017.

The clean-up exercise which began in August 2017 has resulted in the revocation of the licenses of 9 universal banks, 347 microfinance companies, 39 microcredit companies, 15 savings and loans companies, 8 finance house companies, and 2 non-bank institutions, costing tax payers in Ghana over GHc20 billion.

As part of its effort to restore confidence in the banking and specialized deposit-taking sectors, the BoG embarked on the clean-up exercise three years ago to address issues concerning insolvent financial institutions whose continued existence posed risks to the interest of depositors.

The over 6000 direct jobs lost is a conservative estimate which does not take into account temporary and indirect jobs lost during this period. iWatch Africa expects that the direct jobs lost together with the general cost to the nation will see an increase before the close of the year.

Direct Jobs Lost

GCB Bank sacked over 420 workers after absorbing UT, Capital banks:

The GCB Bank sacked over 400 after it absorbed the UT Bank and the Capital Bank its Deputy Managing Director in charge of Finance, Mr. Socrates Affram told reporters in February 2018.

In total, he said, the bank had to lay off 420 staff out of the 850 it inherited from the two banks.

“Between UT and capital, we had regular staff of about 850 from day one and we worked with this number until February 2018 and that was when we pruned it down to 550 due to the rationalisation of the branches,” he explained.

“We assumed 53 branches and we settled on 22 so about 300 staff had to leave. About 120 also had to leave later because their documents did not meet our requirements,” he added.

First Atlantic Bank laid off over 100 after merger with Energy Bank

Over 100 workers of First Atlantic Bank lost their jobs in 2018 following the decision by the new owners to restructure after the merger with Energy Commercial Bank.

The redundancy as was reported then by Graphic Online was as a result of duplication of roles after the merger.

Consolidated Bank laid off over 1700 employees

Following the merger of five banks after BoG investigations revealed that they were insolvent, the newly formed bank, Consolidated Bank announced that it had laid off 1700 employees in 2018.

Out of the number, 700 were mobile bankers of the erstwhile BEIGE Bank, while 1,000 were former employees of the Royal Bank, the Construction Bank, uniBank and the Sovereign Bank who were transferred to the CBG under a purchase and assumption (P&A) agreement approved by the Bank of Ghana (BoG) on August 1.

Microfinance shutdown: Over 2000 people lost their jobs

Over 2000 permanent staff of the collapsed Microfinance Companies have lost their jobs, Executive director of the Ghana Microfinance Institution Network, Yaw Gyamfi, has revealed.

This comes after the Bank of Ghana revoked the licenses of 347 insolvent microfinance companies due to liquidity challenges.

Speaking on Starr FM in June 2019, Mr. Gyamfi revealed that the number is likely to be higher if temporary staff are added to the total number of people likely to lose their jobs due to the action by the Central Bank.

Over 2,000 staff of collapsed savings & loans companies expected to lose their jobs

The Executive Secretary of the Ghana Association of Savings and Loans Companies (GHASALC), Tweneboah Kodua Boakye also revealed that over 2,000 employees of the 15 Savings and Loans Companies whose licenses were revoked on August 16 are expected to lose their jobs.

“We are looking at employees in excess of 2,000. That is for the 15 savings and loans companies on the list,” he made this known on the Citi Eyewitness News.

Mr. Aboagye further pointed out that the revocation was expected since a number of institutions were battling with challenges.

Cost of financial sector clean up to hit GH¢21 bn by end of year

Meanwhile, the cost of the ongoing financial sector cleanup is likely to reach GH¢21 billion by close of this year, according to figures by Finance Minister, Ken Ofori-Atta.

The Finance Minister projected during the Mid-year Budget Review presentation that it is likely that the cleanup could reach $3 to $4 billion dollars by end of this year.

This is equivalent to GH¢21 billion using the Bank of Ghana’s dollar transaction rate for commercial banks.

The huge cost of the financial sector clean-up is raising concerns about whether the general approach to the financial sector clean-up was sound.

It is also uncertain whether the appointed Receivers will be able to recover the costs from owners and directors of the liquidated financial institutions.

Meanwhile, the projected GH¢21 billion is likely to increase further by the end of this year.

Court Cases and Convictions

The receivers of Defunct banks (uniBank Ghana Ltd, the UT Bank, the Capital Bank, the Royal Bank, the Construction Bank, the Beige Bank and the Heritage Bank) have started legal proceedings against 50 directors and shareholders for their roles in the collapse of the banks but have so far failed to secure any convictions.

A Special Investigative Team (SIT) set up to probe financial crimes in the country has also referred many dockets on some members of staff of the defunct banks to the Attorney-General’s Office for advice and possible prosecution.

The receivers, Messrs Nii Amanor Dodoo of KPMG, Vish Ashiagbor and Eric Nana Nipah, both of PricewaterhouseCoopers (PwC), are also pursuing 31,000 customers of the failed banks to recover more than GH¢10 billion in loans and advances.

Many Ghanaians have expressed worry that failure of the State to hold the directors and shareholders of these defunct financial institutions accountable will embolden others which may ultimately result in similar schemes in the future.

Read Also: Ghana’s Banking Crisis: How Ex-President Mahama’s brother GHC302M debt collapsed UT Bank

Meanwhile, the Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, speaking at the Ghana CEO Summit in May called for the establishment of special courts to hasten the pace of the loan recovery process and bring finality to the many cases brought against some directors and shareholders of the defunct financial institutions.

“In my opinion, designating special courts and judges to adjudicate matters relating to specific issues arising out of the bank resolutions and revocation of licences, given the public interest and the enforcement of collateral agreements, will help speed up the process.

“Without an efficient judicial system that is prepared to deal with cases in a swift and decisive manner, all the work done in sanitising the banking system will not yield the desired results and expected outcomes,” Dr. Addison stated.

Report by Gideon Sarpong | iWatch Africa |



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Gideon Sarpong

Gideon Sarpong is a policy analyst and media practitioner with close to a decade of experience in policy, data and investigative journalism. Gideon is a co-founder of iWatch Africa. He is an author; a fellow of the Young African Leaders Initiative (YALI), Thomson Reuters Foundation, Commonwealth Youth Program ,Free Press Unlimited and Bloomberg Data for Health Initiative. Gideon is the founder of Sustainable Ocean Alliance Ghana. He was a 2021 Policy Leader Fellow at the European University Institute, School of Trans-national Governance in Florence, Italy and 2020/21 Open Internet For Democracy Leader. Gideon was also a 2022 Visiting Scholar/Reuters Fellow at the University of Oxford, UK and was selected as a 2022 TRF/Trust Conference Changemaker. He is currently the Africa Regional Cordinator for Environmental Justice Foundation and a 2023 Pulitzer ORN Fellow. Email:
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