Professor Isaac Boadi, a finance and accounting expert from the University of Professional Studies (UPSA), has asserted that the Ghanaian banking sector would have faced complete collapse if the National Democratic Congress (NDC) had won the 2016 elections.
In an interview on GH One TV’s State of Affairs on August 5, 2024, Professor Boadi emphasized the critical nature of the cleanup process initiated by the Akufo-Addo administration.
He argued that without this intervention, the banking sector would have been unable to recover from its difficulties.
Boadi explained that the Quality Assets Review, crucial in identifying troubled banks, made the cleanup essential. He pointed out that the administration’s actions were necessary to prevent a complete sector collapse, stating, “If the NDC had won the 2016 elections and did not implement the cleanup, the banking sector would have collapsed completely.”
The professor also criticized the notion that injecting GHC9 billion into struggling banks would have been a viable solution, noting that previous support from the central bank still needed to rectify the issues.
He cited examples such as UniBank, Beige Bank, and UT Bank, which had received substantial funds but needed to stabilize due to poor corporate governance and mismanagement.
“Some banks granted loans without proper collateral and engaged in insider dealings. These practices, along with false financial reporting, undermined the stability of the banks,” he said.
Despite acknowledging some ongoing challenges, Boadi lauded the banking sector’s current state, asserting that it is now more robust than before the cleanup.
“The banking sector is better off today than in 2015/2016. Although not all indicators are perfect, most are positive. This government saved the banking sector from collapse,” he concluded.
