ghananlpcommunity/ghana-gov-speeches-sentences huggingface dataset:
Since the introduction of the Payment Systems and Services Act, 2019 (Act 987), which permits 12 Bank of Ghana to license and supervise FinTechs, we have seen significant interest from both local and international entities in securing Payment Service Provider licenses to operate in Ghana.
The Bank has so far issued eight (8) payment service providers’ licenses.
This includes three (3) in the electronic money issuer category, four (4) in the Enhanced Payment Service provider category and one (1) in the Standard Payment Service Provider Category.
The latest data on digital transactions and payments, especially mobile money transactions and GhIPSS Instant Pay (GIP) reflects significant growth.
Cumulatively from January to October 2020, number of mobile money transactions increased to 278 million, up from 188 million same time last year.
In terms of values, total mobile money transactions more than doubled to GH¢58 billion, from GH¢28.4 billion last year.
The GhIPSS Instant Pay (GIP) recorded exponential growth in both volumes and values as real time electronic transfers between banks increased significantly.
The Bank of Ghana recognises the key role that financial markets play in the effective transmission of monetary policy.
Therefore, in the three- and-a-half years, the Bank has championed reforms in the repo markets resulting in the adoption and implementati on of a Global Master Repurchase Master Agreement (GMRA) effective October 1, 2020.
These reforms have led to the most improvement in Ghana’s ranking in the ABSA Africa Financial Markets Index, climbing five places on the pillar for the 13 “Legality and enfo rceability of standard financial markets master agreements” in a single year.
Data at the CSD indicates that repo activity under the GMRA is yet to pick up and banks continue to use collateral lending rather than repo under GMRA transactions.
Considering t he risk implications of collateral lending, I encourage you to patronise the repo under GMRA transactions.
The reforms in the financial markets are yielding the expected benefits to the securities market , with increased levels of bond settlements and transactions on the secondary market.
At the end of October 2020, GH¢ 86.2 billion secondary bond market transactions was settled through the banks on the Central Securities Depository (CSD) platform.
This represents a 54.7 percent growth over the GH¢55.7 billion bond market transactions settled for 2019.
In addition , the reforms ha ve broadly eliminated settlement delays and reduced its attendant systemic risks.
Macroeconomic environment and Outlook 23.
Madam President, the prompt fiscal and monetary policy actions taken at the onset of the COVID -19 pandemic have helped prevent a deeper contraction of the economy.
The latest high frequency indicators monitored by the Bank have gained some momentum and reflect a much faster pace of recovery in economic activit y than expected due to the supportive policies, easing of COVID -restrictions, and strong liquidity flows to the economy.
Inflation pressures from events preceding the partial lockdown of the economy in April 2020 are easing.
Headline 14 inflation is currently at 10.1 percent, almost at the upper band of the medium-term target and the latest forecast indicates a return to target by mid-2021.
The macro outlook is generally positive with supportive global conditions, easing domestic inflat ion, and improving growth prospects .
The key risks are the evolution of the budget deficit and the financing needs to support budget implementation and the uncertainty surrounding the pandemic.
Banking Sector Outlook 25.
Madam President, the COVID 19 pandemic presented a major test to the resilience and robustness of the banking sector.
The Bank of Ghana has risen to the challenge with policy measures to protect the financial system and support the real economy as mentioned earlier.
It is by providence that the financial sector clean-up was undertaken at the time that it took place as heading into the pandemic, Ghana had turned its banking system around and restored confidence in the sector.
All the financial soundness indicators, measured in terms of earnings, liquidity, and capital adequacy showed significant improvement.
We had put into place a framework to strengthen banks capital.
The Non- performing loans ratio had declined from 21.3 percent at the end of December 2017 to 15.
15 26.
Madam President, the supervision of banks has been strengthened with systems and structures to identify, assess and proactively mitigate or manage vulnerabilities and threats to stability.
The Bank of Ghana has addressed the growing complexities and interconnectedness among various segments of the financial sector especially among banks and SDIs and the potential systemic risks that could arise due to regulatory arbitrage and information asymmetry.
Going forward, the financial sector will require constant regulatory and policy attention to mitigate the risks.
The economic impact of the pandemic may result in higher non -performing loans and some capital erosion of banks.
The Bank of Ghana is putting g reater focus on identifying the early warning signals and initiating prompt corrective action.
The symptoms of a weaker bank are usually poor asset quality, lack of profitability, loss of capital, excessive leverage, excessive risk exposure, poor conduct a nd liquidity concerns.
These symptoms could occur due to an economic downturn but are often caused by inappropriate business models, poor governance, poor decision making by senior management and misalignment of internal incentive structures with external stakeholder interests.
Looking ahead, the Bank of Ghana will continue to strengthen all the regulatory measures implemented over the last three and half years to maintain confidence and safeguard financial stability.
In the aftermath of the pandemic, (2021, 2022 or 2023) we would have to follow a careful unwinding of countercyclical measures that we have implemented and 16 allow the financial system to function without the regulatory forbearance that we have put into place.
Banks will have to be vigilant an d upgrade their capabilities, improve governance and risk culture and we are optimistic that with this approach, we will build a robust, resilient and capable financial sector to support Ghana’s beyond Aid Agenda.
Thank you, and let us continue to observe all the covid-19 protocols and God bless us all.
BANK OF GHANA – CENTRAL BANK OF THE YEAR AWARD ACCEPTANCE SPEECH By GOVERNOR DR.
ERNEST ADDISON Members of the Central Banking Team, Fellow Award Recipients, Distinguished Guests, Ladies and Gentlemen.
It is a great privilege for the Bank of Ghana to be named the Central Bank of the Year, and I thank the team at Central Banking for the honour done us.
This award reflects our vision to build a central bank of excellence that is well-respected by stakeholders, and further strengthens our resolve to continue to implement sound monetary and financial sector policies.
The successful execution of our Monetary Policy and the Financial sector reforms and subsequent turnaround in the economy , which this Award duly recognises, has been due to the hard work of the whole Bank of Ghana team comprising Management, the Board and staff.
Let me mention the support I got from my very able and efficient deputies, and heads of departments.
The Bank also received invaluable support from the Monetary Policy Committee, and other key collaborative institutions, including the Ministry of Finance and the Economic Management Team, in the pursuit of its policies and programmes.
It is fair to say that the three years of policy reform has firmly positioned Ghana’s economy to withstand the headwinds arising from the COVID-19 pandemic.
Tight monetary policy stance helped reduced inflation significantly and maintained in single digits and well within the Banks target range, and a well anchored exchange rate stability .
We also successfully concluded three years of banking sector reforms, which saw an increase in the minimum capital requirements, clean-up of the financial sector by revoking l icences of weak and insolvent institutions, and a revamp of the regulatory framework to stabilise and strengthen the sector.
Our banks are now well capitalised, liquid, solvent, and resilient to liquidity and credit risk and well positioned to support Ghan a’s economic growth agenda.
On this note, and with humility and profound gratitude, I accept this award on behalf of the Board, Management, and Staff of the Bank of Ghana.
Thank you all for sharing in the vision to ensuring macroeconomic stability and establish a stable, sound, and resilient banking sector to support the country’s growth and development agenda.
I am hopeful that we will continue on this path and consolidate the far -reaching gains of macroeconomic and financial stability in Ghana.
1 MEDIA SENSITIZATION PROGRAMME ORGANISED BY THE GHANA ASSOCIATION OF SAVINGS AND LOANS COMPANIES, ASSOCIATION OF FINANCE HOUSES, AND GHANA ASSOCIATION OF MICRO FINANCE COMPANIES OPENING REMARKS BY MRS ELSIE ADDO AWADZI, SECOND DEPUTY GOVERNOR, BANK OF GHANA, HOLIDAY INN HOTEL, ACCRA 13TH OCTOBER 2020 2 Executive Officers and members of the Ghana Association of Savings and Loans Companies, the Association of Finance Houses, and the Ghana Association of Micro Finance Companies Officials of the Bank of Ghana Officials of Media Houses Invited guests, and distinguished Ladies and Gentlemen 1.
Good Morning, and warm greetings from Governor Addison and the Board, Management, and Staff of the Bank of Ghana.
Today’s event is a very important one, and I applaud the Executives and members of the sector Associations for this collaborative initiative of engaging the media with one voice, on matters pertaining to their sector.
Savings and Loans Companies, Fi nance Houses, and Microfinance Companies, together with Rural and Community Banks , constitute Ghana’s Specialised Deposit-Taking Institutions (SDIs) sector which is regulated under the Banks and Specialised Deposit-Taking Institutions Act of 2016 (Act 930).
These institutions have been licensed by the Bank of Ghana to provide access to finance to segments of our society that would typically not be able to access financial services from commercial banks.
SDIs are expected to accept small deposits and to provide small 3 loans to micro/small businesses and informal sector business operators.
For a developing country like Ghana, t his segment of our society forms the bedrock of our economy and can be harnessed and nurtured to become strong economic actors.
Together, the SDI sector has contributed significantly to our nati on’s socio-economic development by serving individuals and micro, small, and medium sized enterprises.
But for SDIs, a big vacuum would have existed in our financial system today.
At the end of July 2020, the assets of SDIs constituted 8.47 percent of total banking sector assets, and their deposit base and loans made up 7.70 percent and 14.28 percent respectively of the entire banking sector.
Savings and Loans Companies, Finance House Companies, and Microfinance Companies , currently operate through a total of 1,070 branches nationwide serving about 1.5 million individuals and businesses , offer thousands of jobs, and provide loans for c ommerce & finance, salaried workers, transportation and communications, agriculture, forestry and fishing, and small-scale construction, mining and manufacturing, amounting to about Ghc 5.7 billion as of July 2020, with loan amounts per customer ranging from a little over Ghc 1000 to Ghc 20,000 and beyond.
In spite of the achievements of the SDI sector, it has faced challenges over the years.
As you may know, many of the microfinance companies that were licensed from 2012 were “grandfathered” into the then new 4 microfinance licensing regime without the requisite due diligence done on them.
Several of them had operated for a number of years without regulation, and upon being licensed, continued with business as usual, without compliance with licensing requirements and other regulatory norms, and without understanding that as financial institutions, they had to operate under prudent management and strong internal controls to ensure the safety of their depositors’ funds.
A number of Savings and Loans Companies and Finance Houses also strayed away from their mandates under the licences issued by the Bank of Ghana, and tried to operate as banks without the requisite amounts of capital or the expertise to manage the risks they were taking.
Instead of taking small deposits and lending small amounts of money per customer, they took on large deposits and made large loans, and placed significant amount of funds with other SDIs and related parties with little or no prospects of getting back these funds.
Essentially, it is these factors, namely, poor capitalization, poor business models, poor governance and risk management, and in some cases fraud and dishonesty, that led to many of these institutions collapsing in the last few years starting with the famous or infamous DKM in 2016, and subsequently many more.
The Bank of Ghana had to revoke the licences of 347 insolvent microfinance companies and 39 microcredit companies on 31 st May 2019.
It is important to note that 155 of these Microfinance Companies and 10 of the Micro Credit Companies had already ceased operations and had been dormant for a number of years.
On 16 th August 2019, Bank of Ghana also revoked the licences of 15 insolvent Savings and Loan Companies and 8 insolvent Finance House Companies.
The affairs of the defunct SDIs are currently being wound down in accordance with relevant laws.
In the meanwhile, Government has stepped in to provide financial relief for their depositors and employees, so that they did not have to wait for years to see if any value might be realized out of the assets of these institutions before they got paid, if at all .
Out of Ghc 6.5 billion in cedi deposit claims validated by the receiver of the failed SDIs, an amount of Ghc 6.39 billion has been paid in cash to depositors, leaving a balance of Ghc110 million being claims of related parties (shareholders, directors, and affiliates) of the defunct institutions who played active roles in their management and control.
The clean-up of the SDI sector was necessary.
First of all, the laws under which we regulate these institutions require that we revoke their licenses when they are no longer able to honour their obligations to their customers, after they failed to address unsafe and unsound 6 practices, and solvency and liquidity challenges.
Secondly, it was important to protect depositors of these institutions whose deposits had been locked up for months and years, and the general public that continued to do business with these institutions without knowing their true financial condition.
Thirdly, the safety of the financial system was at stake, as confidence in the entire system was being eroded.
The public simply did not know the difference between an SDI that was distressed and one that was not.
Once the public began to see signs of certain SDIs being unable to honour their obligations to their customers, they started to demand a return of their deposits from other financial institutions, leading to challenges for those institutions that were otherwise strong.
Following the cleanup of the SDI sector, there are currently 25 Savings and Loans Companies, 15 F inance Houses/Leasing Companies , 137 Micro Finance companies , and 144 Rural and Community Banks , currently operating.
In order to mitigate the risk of reoccurrence of mass failures in the SDI sector, the Bank of Ghana has revamped its supervision of the sector and is working on new rules on corporate governance and risk management to guide operators in the sector.
The operationalization 7 of the Ghana Deposit Protection Scheme in October 2019 will also help to protect small depositors of SDIs in the event that they fail.
The Bank of Ghana continues to engage with the SDI Associations to explore how best to reposition the sector going forward .
In the meanwhile, we expect SDIs to refine their business models and ensure that they are aligned to the policy objective for which the sector was created.
In the case of the Savings and Loans Companies and Finance Houses Companies, the policy objective is to fill the “missing middle”, i.e.
segments such as the SME sector, that the banks typically would not service.
For Microfinance Companies and Microcredit Companies, we expect them to continue to expand access to finance to the informal sector, micro businesses, low -income households , and marginalized groups such as women entrepreneurs, youth entrepreneurs, start -up businesses, and similar groups.
Altogether, we expect the SDI sector to be the key delivery channel for financial inclusion , a key requirement for Ghana’s socio -economic advancement.
There are still many Ghanaians and businesses that do not have access to savings products and credit facilities, and this presents opportunities for the SDI sector to grow.
Under the National Financial Sector Development and Inclusion Strategy (2018 -2023), 8 Government expects an increase in access to finance from the current rate of 58 percent to 85 percent by 2023.
To stay true to their mandate, and to stay relevant in our fast – evolving technology-driven financial industr y, SDIs must prioritise good governance including strong internal controls and risk management, and customer care, and ensure that they keep their eye on the quantity and quality of capital they have when making business decisions.
We expect them to embrace digital financial services to provide more financial services on a cost -effective basis to the vulnerable groups in our society.
They can, however, only do this when they have the right amounts of capital to invest in cutting -edge technology, strong and independent Boards of Directors, expert human capital, and effective internal controls.
Given the SDI sector’s importance to the economy, the Bank of Ghana has provided regulatory reliefs to help support the sector and their customer base during the ongoing COVID-19 pandemic.
Among other things, we have reduced their liquidity reserve ratios, and adjusted their loan-loss provisioning rules, to allow them to provide loan repayment moratoria and other reliefs to their customers who are some of the worst-hit by the pandemic.
9 17.
Let me conclude by reiterating the commitment of the Bank of Ghana to building resilient and robust banking and SDI sectors that contribute positively to economic growth and development .
Our regulatory measures will continue to promote stability, integrity, and inclusiveness in our financial system.
I wish you all gathered here today, mutually-beneficial discussions.
This event presents a rare opportunity for the SDI Associations to better explain the operations of their sector to the media, and for the media to ask questions and to provide feedback to the Associations on perceptions of customers and the general public as far as SDIs are concerned.
We need the media to be a real partner that understands the financial sector and the regulatory framework within which it operates, in order to lead the public discourse in a dispassionate and expert manner.
I am confident that today’s event will help in that direction.
Thank you all for your kind attention!
The S&L Watch - Issue 1, 2020 GHANA ASSOCIATION OF SAVINGS AND LOANS COMPANIES G HASALC 16 W elcome, Madam.
We are very honoured to be able to interview you today.
I am truly honoured.
You were appointed Second Deputy Governor of the Bank of Ghana by H.E.
the President in February 2018.
How has the journey been so far?
I got appointed at a time when the Bank of Ghana had closed two failed banks, and a lot more cleaning up was necessary given the state of the banking sector.
I settled in to work almost immediately, supporting the Governor in his vision to clean up the Banking and the Specialised Deposit Taking Institutions (SDIs) sectors and to restore conﬁdence, integrity and professional standards in the industry.
Following the clean-up, which was completed in August 2019, we focused our attention on strengthening our regulatory framework to address gaps and weakness identiﬁed, and making our supervisory structures and processes more robust while strengthening the capacity of our supervisory staff.
Just when we were beginning to see signs of the industry bouncing back to resilience, the world and for that matter the country was hit with the COVID-19 pandemic.
This has required extra vigilance on our part to fully appreciate the pandemic’s impact on the ﬁnancial sector and on the economy as a whole, while designing appropriate interventions to address these impacts.
All in all, these last couple of years have been intense and challenging, but a resolute focus on service to our nation has kept me going.
The exemplary and visionary leadership of the Governor, Dr.
Ernest Addison, the support of my colleagues, the First Deputy Governor, Dr.
Mrs Addo Awadzi after delivering Key Note Address at GHASALC AGM in 2019 The S&L Watch - Issue 1, 2020 161 INTERVIEW WITH MRS ELSIE ADDO AWADZI SECOND DEPUTY GOVERNOR, BANK OF GHANA The S&L Watch - Issue 1, 2020 GHANA ASSOCIATION OF SAVINGS AND LOANS COMPANIES G HASALC 17 Maxwell Opoku-Afari, and our excellent technical team across the Bank (the unsung (s)heroes) have made all the difference.
What are your responsibilities as Second Deputy Governor?
My official responsibilities include supervisory oversight over our bank and SDI regulatory and supervisory functions as well as our ﬁnancial stability mandate.
This is in addition to overseeing other key areas of the Bank’s operations, and generally supporting the Governor in steering the affairs of the Bank.
I am also a member of the Bank’s 13-member Board of Directors, and a member of the statutory Monetary Policy Committee.
I also serve on the Financial Stability Council established in January 2019 by H.E.
the President and represent the Bank on a number of public sector Boards and committees.
You have had a very rich career over the last 24 years both locally and internationally.
Please tell us brieﬂy about your professional background and how that has supported you in your current role.
I started out as a corporate lawyer in early 1996 after I completed the Ghana School of Law in 1995.
After a few years of working on the legal aspects of complex corporate ﬁnance transactions, I decided to enroll in business school to study ﬁnance.
This was to augment my professional background in law to help me better advise clients.
After graduating from my MBA (Finance) programme in the year 2000 from the University of Ghana Business School, I worked brieﬂy with Barclays Bank (now ABSA) as a Senior Treasury Dealer, taking positions in local currency and foreign currency transactions on behalf of Barclays.
I enjoyed this for a while, but it wasn’t long before I realized I wanted something more.
My ideal role was going to be one that gave me the opportunity to use both law and ﬁnance and not one or the other only.
I left Barclays in search of that ideal career.
I spent some time working for a consulting ﬁrm which gave me ample opportunity to work on a wide range of projects including corporate ﬁnance, bank restructuring, public debt restructuring, capital markets development in Africa, and ﬁnancial sector policy reforms, among others, all of which gave me the room to combine both my legal and ﬁnance expertise.
I then went on to set up a boutique law practice that focused on advising local and international ﬁnancial institutions on loan and equity transactions, as well as advised several public sector agencies and donor agencies on a wide range of policy and legislative reforms to support ﬁnancial sector development and private sector-led growth.
Along the line, I got into mainstream ﬁnancial regulation by serving as a Commissioner of the Securities and Exchange Commission for six years.
In 2008, I relocated to the U.S.
for family reasons.
While there, I studied for another Master’s Degree in International Business and Economic Law at the Georgetown University Law Centre in Washington, D.C.