Professor Isaac Boadi, a leading academic in accounting and finance at the University for Professional Studies, Accra (UPSA), defended the government’s banking sector cleanup, arguing that its benefits significantly surpass the job losses incurred during the process.
Speaking at the ABC News Economic Symposium on the State of the Economy held at Christian Service University in Kumasi on July 25, 2024, Professor Boadi addressed criticisms of the banking sector reform.
He emphasized that while the cleanup reduced approximately 4,000 workers, it was essential to prioritize the protection of depositors’ funds.
“The decision to sanitize the banking and financial sector was the best option,” Professor Boadi stated. “The benefits of the cleanup far outweigh its associated challenges.”
He explained that depositors could have lost their savings recovered from the cleanup. “In a scenario where you must choose between preserving 4,000 jobs or safeguarding 4.6 million depositors, the rational choice is to protect the latter,” he said.
Professor Boadi also highlighted the potential consequences if the cleanup had yet to be executed. He warned that the failure to address the sector’s issues could have led to significant financial losses for depositors, ultimately affecting more people than the number of jobs lost.
“The alternative would have been far worse,” he added.
“Without the cleanup, depositors and employees would have faced severe hardships, totalling approximately 4.6 million people.”
The symposium in Kumasi followed a similar event held in Accra two months prior, continuing the discussion on Ghana’s economic policies and their impact on the country’s financial stability.
