Even if govt pays its ¢30.33m debt to Groupe Nduom, it will still not address GN’s capital deficit

• Posted on August 26, 2019
• by Nana Kwesi Coomson
• Comment

The government has responded to a press conference organised by some aggrieved residents of Elmina last week on the revocation of the operating license of GN Savings and Loans.

According to the government, the claim made by the organisers of the press conference that the woes of GN Savings and Loans had been caused because the government had failed to honour its financial obligations to GN Savings and Loans is completely misplaced.

In the government’s statement, signed and issued by the Deputy Minister of Information, Nana Ama Dokua Asiamah-Adjei, it said: “Indeed, as at 6th August, 2019, Government’s indebtedness to GN amounted only to GH¢30.33 million. An agreement has, indeed, been reached between the Ministry of Finance and GN to settle this debt. However, even when completely settled, it will still not address GN’s capital deficit of GH¢683.66 million.”

It added:”The Akufo-Addo administration has nothing to gain from the closure of a company belonging to a Ghanaian. That is not how the President views his mandate. On the contrary, since assuming office in 2017, the pre-occupation of President Akufo-Addo has been to incentivize the Ghanaian private sector to be able to compete effectively in the region, the continent and the world, create jobs for the Ghanaian people, and put our nation onto the path of progress and prosperity.”

Below is a full copy of the government’s response to the press conference

RE: ELMINA PRESS CONFERENCE ON GN SAVINGS & LOANS

Government takes note of a press conference, held in Elmina on Wednesday, 21st August 2019, by some aggrieved residents of Elmina on the Friday 16th August 2019 decision of the Bank of Ghana to revoke the operating licenses and close down twenty-three (23) insolvent savings and loans companies, including that of GN Savings and Loans Company, owned by Dr. Paa Kwesi Nduom, a native of Elmina.

Despite the detailed statement put out by the Bank of Ghana explaining the rationale for their decision, the Elmina press conference sought to lay the blame for the closure of GN Savings and Loans at the doorstep of Government and indeed, of President Nana Addo Dankwa Akufo-Addo.

It is important to repeat, for the record, that the operating License of GN Savings and Loans was revoked, in the words of the Bank of Ghana because of “insolvency and liquidity challenges”.

As stated clearly in the Bank’s statement, “GN’s insolvency problems are larqely attributable to overdraft and other facilities it extended to its related parties who are other companies in the Groupe Ndoum network of businesses under circumstances that violated relevant prudential norms”, including transfers of large sums of money (US$62,25,516.93, GBP718,528.59 and EUR4,200) from depositors’ funds to foreign accounts of companies of Groupe Nduom, in breach of section 19 of the Foreign Exchange Act 2006, Act 723, Section IV of Bank of Ghana Notice No. BG/GOV/SEC/2007/4, and subsequent Bank of Ghana Notices issued in August 2014 prohibiting such practices.

Thus, the claim made by the organisers of the press conference that the woes of GN Savings and Loans had been caused because Government had failed to honour its financial obligations to GN Savings and Loans is completely misplaced. Indeed, as at 6th August, 2019, Government’s indebtedness to GN amounted only to GHc30.33 million. An agreement has, indeed, been reached between the Ministry of Finance and GN to settle this debt. However, even when completely settled, it will still not address GN’s capital deficit of GHc683.66 million.

The Akufo-Addo administration has nothing to gain from the closure of a company belonging to a Ghanaian. That is not how the President views his mandate. On the contrary, since assuming office in 2017, the pre-occupation of President Akufo-Addo has been to incentivize the Ghanaian private sector to be able to compete effectively in the region, the continent and the world, create jobs for the Ghanaian people, and put our nation onto the path of progress and prosperity.

The deliberate attempt to draw in Government and President Akufo-Addo into the insolvency problems of GN Savings and Loans and others is totally unwarranted, unfortunate, and without any substance.

The Bank of Ghana is an independent institution of State. Persons who may feel aggrieved by actions of the Central Bank, may employ the established avenues for redress, including recourse to the courts for the resolution of their grievances. President Akufo-Addo has not, and will not interfere with the workings of independent institutions of state.

Nana Ama Dokua Asiamah-Adjei (MP)

Deputy Minister