The Majority Chief Whip, Mr. Frank Annoh-Dompreh, has refuted speculations regarding the state-owned commercial bank, the National Investment Bank (NIB), being sold off.
Instead, he has highlighted ongoing efforts to recapitalize the bank, ensuring its sustainability.
Mr. Annoh-Dompreh’s statements came in response to an allegation by Minority Spokesperson on Finance, Mr. Isaac Adongo, who suggested a potential acquisition of NIB by ADB Bank. Adongo’s claim raised concerns of a conflict of interest, given the Bank of Ghana’s substantial ownership stake in ADB.
Addressing members of the Parliamentary Press Corps (PPC) at Parliament House in Accra, Mr. Annoh-Dompreh emphasized that there is no current plan for a sell-off. He expressed a primary concern about avoiding undue negative publicity and called on the minority to present evidence if they assert the likelihood of a sell-off. He also encouraged the minority to communicate their intentions openly.
Furthermore, Mr. Annoh-Dompreh affirmed his support for recapitalization as an alternative to a sell-off, asserting that the government has not reached a decision on a sell-off yet.
Since 2017/2018, Mr. Annoh-Dompreh highlighted the absence of audited financial statements for NIB and the bank’s significant exposure to loans in the construction sector.
Additionally, Mr. Annoh-Dompreh, the Member of Parliament for Nsawam Adoagyiri, disclosed that the previous NDC administration disbursed 500 million Ghana cedis to non-financial institutions, with the funds yet to be fully recovered.
He explained that NIB is currently striving to recover these funds, a process that is time-consuming. This prompted the need for a sovereign guarantee through the Ghana Amalgamated Trust to raise capital. As of now, these efforts have not been entirely successful. The Minister has intervened by allocating 857 million Ghana cedis, consisting of 800 million Ghana cedis and 57 million Ghana cedis. However, for a bank like NIB, this sum remains insufficient, and more financial support is required.
Recent reports have indicated the potential acquisition of NIB by ADB, especially as NIB currently faces liabilities exceeding 2 billion Ghana cedis. NIB, among the 23 banks registered with the central bank, has encountered difficulties in the past, marked by inherited losses, weak IT infrastructure, expensive service contracts, a high staff-to-service ratio, and legal disputes, including the Eland International Thailand and Eland Ghana court cases.
Mr. Annoh-Dompreh, however, stated that the current management is actively addressing these challenges, with audited financial statements revealing the necessity for a 2 billion Ghana cedis recapitalization to strengthen the bank’s financial position.
NIB, initially established as Ghana’s first development bank to promote rapid industrialization across all sectors of the nation’s economy, has undergone comprehensive management, institutional, and financial restructuring to enhance its status as a world-class bank, focusing on development and commercial banking activities.
Source: Norvanreports