Ghana goes after former Finance Minister over bank collapse, industry crisis

Ghana is coming after its former Finance Minister, Kwabena Duffuor, for his role in the activities that led to the collapse of one of Ghana’s biggest local lenders. The West African nation’s banking industry had suffered a banking crisis due to financial mismanagement.

The banking crisis had led to several job losses and also cost the Ghanaian government financial loss during the period. As the government began to crack down on individuals, Duffuor was identified as one of the perpetrators of the crisis that rocked its banking industry.

Poor governance and weak regulatory oversight were some of the factors that caused the bank crisis in the country. In other to prevent the total collapse of the banking industry, the Central Bank of Ghana intervened in August 2017. The government was able to secure the savings of about 4.6 million depositors and protect jobs at bankrupt banks. It also gave bailouts of 12.5 billion cedis to several second-tier lenders.

What did Duffuor do? He was said to have received 663.3 million cedis ($122 million) “knowing it had been obtained by means of a criminal offense.” This led to allegations of theft and money laundering levelled against him at the Accra High Court.

(READ MORE: Convicted former UBS Group stock trader now plans to redefine Ghana’s mortgage industry) 

Duffuor, who served as finance chief of Ghana from 2009 to 2013, is the founder of Unibank Ghana Ltd, the bank where shareholders and related parties allegedly took 5.3 billion cedis in loans and other withdrawals without following due process. This led to the declaration of bankruptcy, a Bloomberg report disclosed.

The former governor of the Bank of Ghana from 1997 to 2001, however, denied the allegations against him.

Duffuor is not alone in the net: Aside from Duffuor, seven other individuals were named in the filing Wednesday. A former deputy governor of the Bank of Ghana, Johnson Asiama, was also mentioned in the court filings. Asiama was said to have ignored due procedure when he granted a facility for the benefit of Unibank through another lender.

The decision by Asiama reportedly cost Ghana financial loss to the tune of 150 million cedis. He has also been accused of granting another lender, UT Bank, – which lost its banking license in 2017 – liquidity without due procedure as well.

Asiama was the deputy governor of the Bank of Ghana until 2018, resigning almost two years after his tenure began. He was said to have resigned “because the work environment has become uncomfortable.”