Ghana Strengthens Capacity to Avoid Repeat of Banking Cleanup

(Bloomberg) -- The Bank of Ghana is strengthening its capacity to regulate lenders and avoid a repeat of a sector cleanup which cost the West African nation more than 14 billion cedis ($2.5 billion).

The central bank’s supervision unit is employing more staff and acquired a new IT system to monitor compliance, Osei Gyasi, head of the division, told a conference Tuesday in the capital, Accra. Personnel are receiving training on how to apply regulation stringently, he said.

Last month, the central bank completed an overhaul of the financial sector, which started in August 2017. It has seen the number of lenders cut by almost a third to 23, second-tier lenders reduced to 25 from 40, finance houses to 11 from 19, and micro-finance and micro-credit lenders to 168, from 554.

“All that has happened is informing the steps we should take going forward in order that a cleanup like this does not happen again,” Gyasi said.

The government set aside 11.2 billion cedis to bail out depositors of lenders and 925 million cedis to cover those of micro finance and micro-credit companies. As much as 1.2 billion cedis was also set aside to bailout savings and loans.

To contact the reporter on this story: Moses Mozart Dzawu in Accra at mdzawu@bloomberg.net

To contact the editors responsible for this story: Andre Janse van Vuuren at ajansevanvuu@bloomberg.net, Pauline Bax

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