The Minority in Parliament has voiced its strong opposition to the government’s proposed merger of the National Investment Bank (NIB) with the Agricultural Development Bank (ADB).
This comes amid reports that the Akufo-Addo-led government has been pursuing this merger for some time, to establish the National Development Bank to address the financial challenges faced by both institutions.
Addressing the media in Parliament on Thursday, September 28, 2023, the Ranking Member of Parliament’s Finance Committee, Isaac Adongo issued a strong appeal to the government, urging it to embark on a substantial restructuring of the struggling NIB to avert the possibility of the bank’s liquidation.
Top news parliamentary correspondent Yesmeen Abubakar Tetteh who was present at the press conference reported that ,The Bolgatanga Central MP also voiced concerns about the potential consequences of allowing a systematically crucial institution like NIB, which currently grapples with liabilities surpassing GHc2 billion, to collapse.
“NIB’s biggest problem is that it is suffering from a capitalization deficit of GHC2.4 billion. However, a casual review of NIB’s balance sheet shows that a restructuring of the balance
sheet can generate more than GHC2.75 billion to wipe off the GHC2.4 billion and leave a free
shareholders fund and equity of about GHS350 million towards recapitalization and a total cash injection of GH2.8b. It is therefore puzzling that anybody sitting on this gold mine will attempt to give it out to somebody for peanut,” Adongo said.
He also added that the merger might be a guise to privatize the two banks to government affiliates, potentially facilitating a form of state capture.
“Even in our traditional settings, no man marries the mother because he feels grown up, as big or probably bigger than his mother. It will be an abomination, if not a sacrilege for a son to want to marry his mother. It is very clear that all the complexity introduced into this arrangement and the continuous deliberate haemorrhage of NIB is the last step towards putting the two banks together to sell to themselves through state capture. It is obvious that they will offload BoG and GoG shares to themselves under the disguise of a strategy investor. Unless there are ulterior motives, NIB should not be subjected to this predatory regulatory and Boardroom antics.”
Mr Adongo also called on the government to settle the debts owed to NIB and put forth measures to ensure the bank’s sustainability.
“The government should consider restructuring NIB’s balance sheet by converting the outstanding NIB debts owed to the government into equity. While the government claims it lacks funds for capitalization, it has provided substantial loans to NIB, totalling 1.3 billion. This amount essentially belongs to the government, and by converting it into equity, the bank can be adequately capitalized.”
Isaac Adongo also expressed concerns that the merger, followed by the acquisition by ADB, would result in the loss of some 800 jobs.