Business News of Thursday, 10 January 2019
The Ghana Federation of Labour wants the government to immediately halt plans for the Ghana Amalgamated Trust (GAT) to invest private pension funds into some local banks following a rocky year for the banking sector.
“We think it is inappropriate. We think it is wrong and we think that it must not be encouraged at all,” the federation’s Deputy Secretary-General, Kenneth Koomson told Citi News.
Mr. Koomson said the move was too risky despite the good intentions. “The trustees are given the right to take such decisions that will inure to the benefit of the fund owners and we expect that they will take the right decision, but it looks like there is a certain arrangement to present the GAT as a worthy investment arrangement and we think it is quite dangerous.”
“It is important that immediate action be taken by organized labour on what would be the possible way out instead of looking at the pensions fund as a way to finance these banks,” he added.
The Ghana Amalgamated Trust was introduced by the Ministry of Finance to support well-run but under-capitalised banks to meet the new minimum capital requirement as part of the banking sector clean-up.
The five beneficiary banks are ADB, NIB, merged Omni Bank and Sahel Sahara, Universal Merchant Bank, and Prudential Bank.
But the government has said the five banks being cushioned under the Ghana Amalgamated Trust arrangement must not consider the support they are receiving as a bailout.
The Finance Ministry said “the GAT arrangement is to support solvent and strong indigenous banks to meet the new minimum capital requirement, and is not a bailout programme for banks that have been resolved by the Bank of Ghana.”