Vice President Dr Mahamudu Bawumia says the rationalisation of the banking sector by the government, has ensured that deposits of 4.6 million Ghanaians were saved.

He said the depositors would have completely lost their deposits just like their colleagues did in the collapse of 82 micro finance institutions under the National Democratic Congress (NDC).

“...4.6 million people will have lost they deposit completely, can you imagine? Like the depositors of the 82 financial institutions that have collapsed before who were not paid. We were at the brink of losing the deposits of 4.6 million people that was why the rescue plan was implemented”, he said.

Speaking in an interview on Accra based radio station, Peace FM’s morning show 'Kokrokoo' on Tuesday, Dr Bawumia said banks and financial institutions were badly governed under the Mahama-led administration hence, the Akufo-Addo government had no option than to close down some of them.

“There were such bad practices in governance in the management of these institutions and we had to step in because most of them or some of the banks were set up without any capitals. They just lied their way to setting up the banks”, he stated.

The Vice President added that the banks were using the Central Bank's liquidity support for other purposes.

“They moved money here, showed it to the Central Bank, the Central Bank then licensed them, then they moved the money out. And they were using the Central Bank's liquidity support for other purposes other than reviving these banks”.

“By the time we got into office things were really unraveling and the new management at the Central Bank decided to rescue because we were at the brink, really on the brink of the collapse of the banking system. And so they had to move quickly to rescue the financial system and that is why they revoked the licenses of nine banks or so, and 23 savings and loans (companies), and over 300 microfinance institutions”, he explained.

Dr Bawumia said although the then National Democratic Congress (NDC) administration was aware of the situation, they did nothing about it and rather kept offering liquidity support.

There have been claims that government could have used other means to save the banks and prevent the loss of jobs, but the Vice President said “This is one of the most important acts that have been done to save the economy."

The Bank of Ghana (BoG) on May 31, 2019 revoked the licenses of 347 microfinance companies it says were insolvent.

A statement issued by BoG said these actions were taken pursuant to section 123 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires the BoG to revoke the licences of a bank or Specialised Deposit-taking Institution (SDI), when it determines that the institution is insolvent or is likely to become insolvent within the next 60 days.

Consequently, the BoG appointed Mr. Eric Nipah as Receiver for the specified institutions in line with section 123 (2) of Act 930.

Meanwhile, Dr Bawumia said his government has drastically reduced the hardship of Ghanaians.

"We haven't eliminated hardship but compared to what we inherited, we have reduced hardship tangibly," he said.

According to him, although it can't be said that the government has eliminated the sufferings of the populace, it is a known fact that President Akufo-Addo’s government has reasonably brought reliefs to cushion the citizenry.

He cited the government's Free SHS policy, stable electricity supply, and the payment of teacher and nurses' trainee allowances among others as some of the initiatives that have reduced the burdens on Ghanaians.

He also gave the assurance that the living conditions of Ghanaians will ultimately be better in the second term of the Akufo-Addo administration.