Bawumia defends NPP’s banking sector cleanup, questions Mahama’s pledge to restore collapsed institutions

Dr. Mahamudu Bawumia, the New Patriotic Party (NPP) flagbearer, has taken a firm stance against John Dramani Mahama’s promise to restore the licenses of collapsed financial institutions, arguing that the NPP’s intervention saved Ghana’s banking sector from a catastrophic collapse.

Speaking during a media engagement, Dr. Bawumia expressed shock at Mahama’s pledge, which was made during the launch of the National Democratic Congress (NDC) manifesto in Winneba. Mahama criticised the NPP for what he termed the unjust collapse of financial institutions and vowed to reinstate their licenses if he were elected.

In response, Dr. Bawumia defended the NPP’s actions, stating that the decision to merge and close down certain banks was necessary to protect the deposits of millions of Ghanaians.

“We saved the deposits of 4.6 million bank depositors who really were going to lose their deposits if those banks were not saved,” Bawumia stated.

Dr. Bawumia highlighted the grave situation the NPP inherited, with some banks engaging in risky and illegal practices that threatened the entire banking sector’s stability.

He described instances where banks extended loans far beyond legal limits, misused capital, and funnelled funds into private ventures.

“Some of the banks broke all the rules and extended loans way above the single obligor limits,” he noted.

He argued that these actions were not arbitrary but were essential to prevent a systemic crisis, contrasting the NPP’s interventions with what he termed Mahama’s lack of understanding of the financial sector’s complexities.

“I don’t understand whether the former president has taken his time to understand the banking sector,” Bawumia said, urging Mahama to review reports from the Bank of Ghana and the appointed receiver to grasp the dire situation the NPP had to manage.

Bawumia’s remarks come as part of a broader effort by the NPP to showcase their economic management credentials and discredit Mahama’s campaign promises as impractical and uninformed.

By framing the banking sector cleanup as a rescue mission that saved millions of depositors, Bawumia aims to shift the narrative away from accusations of injustice towards a narrative of necessary and prudent governance.

The debate over the future of Ghana’s financial sector is set to be a key issue in the upcoming elections, with the NPP emphasising stability and the NDC promising to reverse what they view as punitive measures against local banks. Dr. Bawumia’s defence of the NPP’s actions underscores the party’s commitment to maintaining a stable financial environment, even if it means taking unpopular decisions.