Managing Director of the Ghana Stock Exchange (GSE), Mr. Kofi Yamoah says government can make citizens own stakes in the Ghana Amalgamated Trust (GAT) by offloading its shares.
He observed government could also pump funds into the trust, assume increased ownership, and then sell stake in the investing public as has happened with government interventions in other jurisdictions.
In September 2017, the Bank of Ghana issued a directive to commercial banks to raise their liquidity ratios from GHc120 million to GHc400 million, representing more than 233 percent increment, by December 31, 2018. While some banks managed to increase their stated capital to the required sum, others couldn’t and were faced with having their license revoked or get downgraded to a Savings and Loans status.
Fearing another mass unemployment situation after the collapse of seven banks, the Central Bank together with the Finance Ministry and government set up the Ghana Amalgamated Trust Limited (GAT) to help protect about 3,000 jobs and retain indigenous ownership in the banking sector.
The beneficiary banks include the ADB, Heritage, Prudential, Premium, the National Investment Bank (NIB), the Universal Merchant Bank (UMB) and the Omni Bank.
Government is supporting private investors to raise up to GHc2 billion to invest in the above properly governed and solvent indigenous banks which are under-capitalised. The funds are to be raised through the issuance of two bonds and the proceeds used to support the banks to raise their liquidity ratios from GHc120 million to GHc400 million.
In return, the investors, through a special-purpose vehicle (SPV) – the Ghana Amalgamated Trust Limited (GAT) – would own part of the beneficiary banks in amounts that were commensurate with the amount of funds invested, a source in government submits.
Government, its emerged is only supporting the transaction by providing partial risk guarantee of up to 70 percent for the bonds however GAT is to exit after a minimum of three years and a maximum of five years through a sale to existing shareholders or new investors or listing on the GSE.
By Michael Eli Dokosi/goldstreetbusiness.com