Business News of Saturday, 12 January 2019
The President of the National Association of Graduate Teachers (NAGRAT) wants the government to abort plans of using GHc2 billion from private pension funds to support distressed banks.
Angel Carbonu says the government has no right to make such an arbitrary decision.
“Why should there even be a directive directing pension money to be sent to GAT when the government does not have that authority to do that in the first place. This is because the money does not belong to government. This is a non-starter and we are calling on government to withdraw this approach,” he said on Citi TV/ Citi FM’s news analysis programme, The Big Issue on Saturday.
The Governor of the Bank of Ghana, Dr. Ernest Addison, announced on January 4, 2019, that government is to form Ghana Amalgamated Trust made up of some private pension funds in the country to support to some five banks who were solvent but were unable to raise GHc400 million for the recapitalization drive.
The five banks included ADB, NIB, merged Omni/Bank Sahel Sahara, Universal Merchant bank, and Prudential bank.
Details of the Ghana Amalgamated Trust are currently scanty as the government is yet to give adequate information on the way forward.
The Finance Ministry in an earlier statement warned the beneficiary banks not to consider the support as a bailout because it is “to support solvent and strong indigenous banks to meet the new minimum capital requirement, and is not a bailout programme.”
Carbonu argued that government should have pitched the idea to the private pension managers instead of imposing the deal on them.
“Government does not determine where monies are supposed to be sent to. The schemes are regulated by the NPRA. So if government forms an organization called Ghana Amalgamated Trust as a special purpose vehicle of getting resources to distressed banks and government feels that this business is a viable business proposal, all it has to do is to make a presentation to any of these schemes.”
“When the schemes study the presentation and realize that it is a viable platform for investment, the schemes will decide whether or not to send money there. Why should there even be a directive directing pension money to be sent to GAT when the government does not have that authority to do that in the first place. This is because the money does not belong to the government.”
He said the government should immediately make known who the managers of the GAT would be.
“In any case, when was GAT established, what is their track record, who are the people managing GAT, what is the percentage are you giving the workers when they send their monies there? Now the banks that we are talking about, How strong are they, how economically viable are those institutions? This is a non-starter and we are calling on the government to withdraw this approach,” Carbonu added.
TUC to meet over GAT
Meanwhile, the Trades Union Congress will meet on Monday to take a decision on the government’s decision to use.