Former Finance Minister, Seth Tepker says the current payment plan for withheld depositors funds as announced by the Receiver of defunct Microfinance Institutions and Savings and Loans companies is unfair, a slap in their faces especially after the impression created that all will receive their cash in full.
According to Mr Tepker, the wisdom that informed the establishment of the Energy Sector Levy Act (ESLA) was intended to generate enough funds, some of which should be available by now, for the Nana Akufo Addo-led government to easily access to settle monies its unable to pay depositors because of the Receivers cut-off point.
In April this year, a statement issued by the Consolidated Bank of Ghana, said upon directives of the Receiver, a special account will be opened to hold the balance payable to all validated customers whose deposits exceed the cash payment threshold as advised.
It added that funds in excess of the cut-off for cash payment would be paid in equal installments every six months over a five-year period after the initial payment is made in March 2021.
“The Bank has established a mechanism for those depositors who wish to obtain cash ahead of the liquidation schedule to discount those expected cashflows with the bank at a competitive rate,” it added.
But those affected feel shortchanged. They are also mounting pressure on the President, Nana Akufo Addo and his government to walk the talk after the full assurances made in the State of the Nation Address, SONA in February this year that all those affected will receive their cash in full.
Commenting on the development on Accra based Kasapa FM, Former Finance Minister, Seth Tekper explained that ESLA would rake in about GHS 3billion annually.
“So between 2016 and 2019 when the report was published, ESLA had almost about 10billion cedis in its account. Fundamentally, and of course I must state the ESLA funds were set up to also cater for monies owed contractors and to settle Energy sector debts.
….. “But all what I am saying is that it should have been prioritized. There is debt that is owed by the Energy sector and other liabilities which is weighing on the balance sheet of banks and turning into non-performing loans” – Mr Tekper emphasized.
He added…”In fact the Volta River Authority, VRA debt that was classified as stress on banks was reversed because of the flow from ESLA which went into a special escrow which Parliament set up during the Mahama administration”.
Mr Tekper told ‘Anopa Kasa’ show host of Accra-based Kasapa 102.5FM, Kwaku Owusu Adjei, that parliament set up a Debt Service Reserve Account and a Debt Service Account for purposes such as the crisis that befell some financial institutions.
“So if at the time the debt in the energy sector and roads was in the range of $2.4billion, which today is about 12billion, then if you are expecting GHS28billion, you should have cleared the energy sector debt and if you had extended the lifespan of ESLA, then part of the funds could have been dedicated to other liabilities. …And remember the ESLA levy was increased in 2019. When petroleum prices go up, funds accruing to ESLA increase because its on the back of pump price”…..he further noted.
The former Finance Minister who has been speaking to the ensuing debate over government’s policy not to pay all depositors case said, there is no excuse and government must pay depositors handicapped and are crying for their money or restructure what he called a comfortable model to those demanding their cash.
On a specific question for his opinion on the zero-rated 5-yr bonds or take full cash at a discount, Mr Seth Tekper said the NDC government under John Mahama did not do that, what it did was to ask the banks for reduced interest and depositors monies were left intact.