ghananlpcommunity/ghana-gov-speeches-sentences huggingface dataset:
My studies at Georgetown focused on international ﬁnance, ﬁnancial regulation, MRS ELSIE ADDO AWADZI Second Deputy Governor, BoG The exemplary and visionary leadership of the Governor, Dr.
Ernest Addison, the support of my colleague the First Deputy Governor, Dr.
Maxwell Opoku- Afari, and our excellent technical team across the Bank (the unsung (s)heroes) have made all the difference " " 2 The S&L Watch - Issue 1, 2020 GHANA ASSOCIATION OF SAVINGS AND LOANS COMPANIES G HASALC 18 international trade, and other economic policy-oriented subjects that brought home lessons from economic and ﬁnancial crises from all over the world since the Great Depression of the 1930s.
Towards the end of my studies at Georgetown, I participated in Georgetown’s annual externship programme with the International Monetary Fund (IMF) under which students could work on speciﬁc IMF research projects for academic credits.
After completing my Master’s Degree in 2012, I applied to the IMF for full- time employment and was successful after a very competitive recruitment process.
I worked from the IMF’s Headquarters in Washington D.C.
for six years during which time I advised many country authorities (mostly Finance Ministries and Central Banks) in Africa, Asia, the Caribbean, Europe, and the Middle East on banking sector regulatory reforms, banking sector crisis management, and public ﬁnancial management reforms.
I believe that my diverse experiences and my multidisciplinary skills have prepared me sufficiently and helped me navigate my current role.
In your opinion, how has the recent banking and SDI sector clean-up in Ghana gone so far?
What have been the gains?
The clean-up exercise saw the closure of nine (9) universal banks, 23 savings and loans companies and ﬁnance house companies, 347 microﬁnance companies (including 155 companies that had already folded up), 29 microcredit companies (including 10 that had folded up), a ﬁnance leasing company, and a remittance company.
These institutions had become failed institutions as they were insolvent or severely undercapitalized with no prospects of recovery.
Many of them were unable to meet their obligations to customers and other creditors, and their continued existence affected the stability of the rest of the ﬁnancial system.
The relevant law under which the Bank of Ghana regulates and supervises the industry required the closure of these institutions to protect their depositors and the public at large from continuing to deal with them.
The process of winding down the affairs of these institutions is ongoing.
Thanks to ﬁnancial support provided by Government, depositors of these institutions have been paid their validated claim in cash and with ﬁnancial instruments, and employees as of the date on which these institutions were closed are being settled with terminal payments.
These interventions have brought great relief to several thousands of Ghanaians.
These were people who were not able to access their deposits from these defunct institutions long before we closed them down.
Several of these institutions had actually folded up, and locked their doors to depositors without warning, leaving them with no hope of ever retrieving their funds.
A number of these institutions had court actions pending against them or judgments obtained against them in favour of depositors who could not recover monies they had saved with them.
Employees of many of these institutions were being paid below the minimum daily wage and had in many instances not been paid salaries for several months running sometimes into years.
Our interventions not only cleaned up the ﬁnancial sector, but also provided a lifeline to many depositors (including other ﬁnancial institutions who held funds with banks and SDIs) as well as employees and their dependents.
All in all, these interventions were positive for the economy.
It is also important to keep in mind that the clean-up paved the way for stronger ﬁnancial institutions to emerge, to better support economic actors than ever before.
As a result of the clean-up, the banking sector is currently healthier and better able to 3 The S&L Watch - Issue 1, 2020 GHANA ASSOCIATION OF SAVINGS AND LOANS COMPANIES G HASALC 20 no access to savings accounts and much-needed credit to support their economic activities.
This presents enormous opportunities that the sector can pursue in order to grow.
We also expect them to manage their risks prudently considering the extent of their capital base, and to safeguard the interest of their depositors.
We expect shareholders of Savings and Loans companies to appoint directors who fully understand their statutory duties as well as the legal consequences of failing to discharge those duties.
Savings and Loans companies must also invest in the right caliber of managers to manage their affairs prudently.
The Bank of Ghana has provided some regulatory reliefs to the Savings and Loans sector in view of the ongoing COVID-19 pandemic.
Are more reliefs being contemplated?
Since March 2020, we have provided several policy and regulatory reliefs for SDIs in addition to our monetary policy rate reduction of one hundred and ﬁfty basis points that allowed them to reduce their lending rates for the beneﬁt of their customers.
Some of these reliefs include a reduction in the level of provisioning required for loans in the “Other Loans Exceptionally Mentioned” category (i.e.
loans past due by 30 days but below 90 days past due) from 10% to 5% to ease the withstand external shocks compared to the period before the clean-up.
The SDI sector is also in a better state now and is in the process of rebuilding capital buffers.
Following the clean-up exercise, what other reforms is the Bank of Ghana rolling out to further strengthen the SDI sector?
Currently, the SDI sector comprises of 25 Savings and Loans Companies, 15 Finance House Companies, 144 Rural and Community Banks, and 137 Microﬁnance Companies.
A number of important reforms have taken place and others are ongoing, the objectives of which are to address the key causes of the systemic failures that took place in the SDI sector including poor licensing standards, weak capital, weak governance, poor risk management practices (including signiﬁcant lending to related parties and cronies that created unrecoverable loans and investments), among others.
Our recent reforms include the issuance of a Corporate Governance Directive and a Fit and Proper Persons Directive in 2018 and 2019 respectively.
We have also been working on a new Directive on risk management, while sharpening our supervision and enforcement tools and enhancing the capacity and ethical culture of supervisory departments.
The process of good regulation and supervision is a dynamic one that requires constant improvements to help us promote the safety and soundness of the sector.
What are the Bank of Ghana’s expectations for the Savings and Loans sector going forward?
We expect institutions in the Savings and Loans sector to reassess their business models to ensure that they are aligned with the public policy objective for which the sector was created, which is to promote ﬁnancial inclusion through suitable ﬁnancial services for small businesses and households who otherwise do not have access to banking services.
There are still many Ghanaians with We expect institutions in the Savings and Loans sector to reassess their business models to ensure that they are aligned with the public policy objective for which the sector was created, which is to promote financial inclusion through suitable financial services for small businesses and households The S&L Watch - Issue 1, 2020 204 The S&L Watch - Issue 1, 2020 GHANA ASSOCIATION OF SAVINGS AND LOANS COMPANIES G HASALC 21 burden of provisioning on SDIs.
In May 2020, we also reduced the 8% primary reserve ratio for Savings and Loans companies and Finance House companies to 6%, which we estimated would release additional liquidity of GHS 73.36 million for these institutions.
We also committed to putting in place a framework to activate section 46A of the Bank of Ghana Act 2002 (Act 612) as amended, to provide liquidity support to Savings and Loans and Finance House companies facing temporary liquidity challenges, based on strict compliance with eligibility criteria and conditions established by law.
We have also issued guidance to SDIs on the accounting and prudential treatment of loans restructured for customers who are unable to service their loans as a result of the impact of the COVID-19 pandemic.
The Bank of Ghana believes that these measures will go a long way to release liquidity to the SDI sector to enable them to support their customers and continue lending to viable micro and small businesses.
No one really knows how this pandemic will continue to evolve and how it will ultimately impact our economy, so it is premature to know whether additional policy and regulatory reliefs for the sector will be needed.
We will continue to monitor developments in the sector and will respond with additional measures if needed.
So, having cleaned up, introduced new reforms, and responded to the pandemic with policy and regulatory reliefs for the banking and SDI sectors, what is the broad vision of the Bank of Ghana for the industry?
The Bank of Ghana under the leadership of Governor Addison is focused on building a strong banking and SDI sector that contributes to the stability of the ﬁnancial system and helps to support economic growth in Ghana from the bottom up.
To that end, the Bank of Ghana is promoting robust regulation and supervision of the industry, and high standards of professionalism, integrity, and consumer protection.
“There are no short cuts to success.
Do your best in all things, and trust God to do what only He can do.
Never stop believing.
Keep investing in yourself, and invest in others.
Never walk alone.”
We are also actively pursuing efforts to promote digital ﬁnancial services, not only to increase efficiency in the provision and use of ﬁnancial services, but also to improve access for all, especially unbanked and underbanked groups such as women, the youth, and informal sector business owners.
We will expect Savings and Loans companies to scale up their capital base and invest in emerging technologies and the requisite human capital in order to be well-positioned to improve their efficiency and impact throughout the economy.
Any ﬁnal thoughts for the Savings and Loans sector, and for our customers?
In closing, let me reiterate the Bank of Ghana’s commitment to ensuring that we deliver on our constitutional and statutory mandate to promote macroeconomic stability as well as ﬁnancial stability.
To promote ﬁnancial stability, we regulate and supervise institutions like Savings and Loans companies, to help them stay safe and sound, while providing real opportunities for ordinary Ghanaians from every walk of life to access critical ﬁnancial services in every corner of the country.
Savings and Loans companies must operate within the rules that govern their sector and must at all times be governed and managed in a manner that makes them worthy of the trust reposed in them by their customers.
It is important for them to remember that breaches of regulatory and prudential norms ultimately lead to the demise or collapse of ﬁnancial institutions.
The chickens always come home to roost!
It is therefore incumbent on all key stakeholders, including shareholders, directors, managers and other employees of these institutions, to work together towards strengthening these institutions.
We want to see strong and viable indigenous Savings and Loans companies that operate on a sustainable basis for centuries and even branch out into neighbouring countries.
This is not possible without strong and prudent governance and management.
Customers must also remember to choose their ﬁnancial institutions carefully, ensuring that they understand the licence type of their institution, who regulates them, 5 The S&L Watch - Issue 1, 2020 GHANA ASSOCIATION OF SAVINGS AND LOANS COMPANIES G HASALC 22 and the permitted activities for that licence type.
Strangely, we observed in the course of the clean-up that many customers did not understand that different categories of ﬁnancial institutions had different permitted activities and that not all of them were regulated by the Bank of Ghana.
It is important for Savings and Loans companies to step up their public education efforts to better explain their products and services to their customers, as well as how customer complaints are handled both at the level of the Savings and Loans companies and at the Bank of Ghana.
Finally, customers must apply loans they obtain judiciously and ensure that they keep up with repayment obligations in order to build a good credit history that supports affordable borrowing from banks or SDIs in the future.
The Bank of Ghana will continue to work closely with all stakeholders to help unleash the full potential of the Savings and Loans sector to support our national economic aspirations.
What do you love to do when you are not working?
That is an interesting question given the amount of time I spend on work, but I do love to pray, work out, spend quality time with my family, catch up with close friends when I can, and occasionally curl up with a good book and soothing music.
What is your favourite quote or wise saying, and why?
If I were to sum up my world view in a single quote, it would be: “Impact your world right where you ﬁnd yourself and in whatever you ﬁnd yourself doing.
Dream big, and create the future you desire through hard work, integrity, and a positive attitude.
There are no short cuts to success.
Thank you so much, Madam, for your time and valuable insights.
It’s been an absolute pleasure.
Impact your world right where you find yourself and in whatever you find yourself doing.
Dream big, and create the future you desire through hard work, integrity, and a positive attitude " " 6
1 Bank of Ghana’s Experience in Implementing Cybersecurity Policy Frameworks & the Coordination Models Adopted to Build a Robust Ecosystem Alliance for Financial Inclusion High-Level Joint Learning Programme on Inclusive FinTech Ecosystems and Cybersecurity (Virtual) 7th October 2020 Remarks by Mrs.
Elsie Addo Awadzi, 2nd Deputy Governor, Bank of Ghana 1.
Technology has become the biggest driver of change in the financial services sector.
With significant investments in technology, financial services providers are providing convenience and efficiency for customers and helping to expand access to finance for underserved and unserved segments of society.
Technology is also making financial services even riskier, as a result of fraud and other risks that could affect operations, financial soundness and stability, and confidence in the financial system.
Risks to financial inclusion are also pronounced.
Digital financial services (DFS) have become a key catalyst to increased financial inclusion especially for the informal sector, women, youth and other typically underserved groups.
However, increased cyber risks could also lead to service delivery disruptions, operational losses and reputational damage for service providers, while leading to losses for users of these services and a loss of confidence in the financial system.
These could erode gains made in financial inclusion in the developing world.
In the midst of the pandemic, there has been an increase in the use of DFS.
The incidence of fraud and attempted fraud has also increased in particular in the mobile money space but also in ATM and other payments-related fraud.
Key issues to be addressed from a regulatory perspective to help anticipate, identify, and mitigate cyber risks on a continued basis include: a. Improvements in the s ecurity systems and infrastructure of national switches, banks and other financial services providers, electronic money issuers, telcos, fintechs including 3 rd party aggregators and technology service providers; b. Deploying staff and other insiders in fraud prevention and mitigation; c. Enhancing capacity to understand, identify and mitigate cyber risks on the part of operators, regulators, security agencies , and the entire national eco-system d. Enhancing c ross-border regulatory cooperation (regional and global) in respect of financial institutions, telcos, fintechs operating in multiple jurisdictions.
The Bank of Ghana’s approach to addressing cyber risks in the banking and payments ecosystem is designed to safeguard operational resilience, safety, soundness, and integrity of the entire system while promoting confidence in the use of financial services (including DFS) and financial inclusion.
To this end, the Bank of Ghana has taken the following measures: (i) Issued the Cyber and Information Security Directive (CISD) in 2018 which provides for:  Governance requirements for financial services providers to institute key risk mitigation pillars – including a Board C ommittee on information security matters, senior m anagement roles including Internal Audit and Chief Information Security Compliance Officer (CISO), among others;  Technical requirements to augment security including ISO27001 certification and adopt ion of ISO27032, PSI -DSS compliance for 3 institutions that handle, process, store, or transmit debt card, credit card, prepaid card, e-purse, ATM Cards etc.
 Reporting by regulated entities on a periodic basis and as and when incidents occur.
(ii) Our regulatory approach enables payment service providers (e.g.
electronic money issuers, fintechs, and others) to participate in the payments and DFS ecosystem to help generate innovate products and services, but in a manner that ensures that regulatory r equirements are proportional to the risks that are likely to be introduced into the system.
For very small financial service provide rs and fintech, the burden of regulatory requirement is relatively low, but to avoid regulatory arbitrage, their access to p ayments infrastructure is through bigger and more established service providers.
(iii) BoG’s comprehensive Risk-Based Supervisory Framework ensures that cyber security issues are embedded in the supervisory cycle for licensed financial services providers as part of operational risks assessments and overall safety and soundness assessments.
Cooperation among all of BoG’s supervisory Departments overseeing banks, specialized deposit -taking institutions (e.g.
savings and loans companies, microfinance companie s, and others), and payment systems infrastructure and service providers.
A coordinated approach is in place to ensure that risks that cut across are identified and mitigated in a comprehensive manner.
(iv) BoG stresses continued vigilance for all service providers and operators in the ecosystem , as well as continually educates consumers to help empower them to take steps to protect their financial transactions especially those that are digital.
4 (v) BoG also stresses the need for enhanced due diligence in recruitment and outsourcing by financial institutions and payments systems operators and service providers, to mitigate insider fraud.
(vi) BoG has strong cooperation arrangements with key domestic stakeholders.
Cyber security is a key national priority, and governance structures and strategies are in place with leadership at very high levels of Government.
Sectoral cyber security policies and strategies exist.
Within the financial sector, BoG implements policies, strategies, and regulation for the banking and other deposit-taking institutions and payments system infrastructure and service providers.
Information is shared between BoG and the national authorities frequently.
BoG engages with other financial sector regulators bilaterally and at the level of the Financial Stability Council whose mandate is to promote regulatory cooperation, financial system-wide risk mitigation, and crisis preparedness.
Going forward, cross-border cooperation remains an issue to explore to promote information sharing and harmonized approaches to regulating cross -border service providers.
Also, continuous capacity building in the industry and for our supervisory teams will be key, while enhanced consumer education will hel p to empower consumers to make choices that protect their financial assets and livelihoods.
1 Speaking Notes for Dr.
Maxwell Opoku-Afari First Deputy Governor Debt Sustainability Panel CGD Conference on Financing Low-Income Countries: Towards Realistic Aspirations and Concrete Actions in a Post-Covid 19 World October 5-8, 2020 Virtual event October 5, 2020 2 Introduction 1.
The COVID pandemic is still evolving with considerable uncertainty.
The magnitude of the shock has prompted extraordinary responses — first to secure lives, and, second, to reduce the social and economic burden from the pandemic on the vulnerable segments of the population.
Massive fiscal response packages and supportive monetary policy measures have been implemented in many countries to deal with the fallouts from the crisis.
However, in most low-income countries (LICs), the situation has been complicated as most LICs are confronting the crisis under conditions of elevated debt profiles and high debt service payments.
Initial IMF and World Bank Debt Sustainability Analyses (DSA) from the onset of the crisis show that external government debt service payments in LICs will be much higher in 2020 and remain elevated in the medium term.
This has constrained policy responses to the crisis and amplified vulnerabilities across most LICs.
The Fund and other multilateral institutions as well as some bilateral partners have responded with some financial support.
Although the scale of the crisis requires massive additional financial support to safeguard progress towards the SDGs, elevated debt levels and the accompanying high debt service payments means that much of the support will rather fund debt obligations and limit the ability of LICs to respond to the crisis.
This has necessitated calls for suspension of debt obligations and debt forgiveness in some instances and there are major risks inherent in this approach.
The Debt Service Suspension Initiative (DSSI), launched by the G20, for instance provides scope for additional resources for the world’s poorest countries to mitigate the impact of pandemic.
By freezing external debt service payments until the end of 2020 from all official bilateral creditors, it is estimated that a debt ‘standstill’ of roughly $11.5 billion in emergency liquidity support could be available to eligible countries in 2020, equivalent to about 40 percent of total projected public external debt service (World Bank, 2020).
As one would naturally conclude, the DSSI is a step in the right direction, and designed to help countries respond to the crisis.
For example, some analysts have argued that the emergency support by the 3 IMF/World Bank and the announcement of the DSSI programme have contributed to the significant reductions in the sovereign bond spread for most of the emerging market economies, including even those that did not participate in the programme.
However, risk perception levels remain high and above the pre-COVID levels.
It thus appears that the pandemic would leave behind some medium to long-term shocks to fiscal and financial settings of these economies such that their fading would require more than what the DSSI would seek to solve.
Several limitations of the programme have been identified: a. Adverse impact on market access countries since it may send the wrong signal about the country’s credit worthiness.
b. Potential unintended legal ramifications from possible contravention of some of the legal clauses/agreement.
c. Heterogeneity of debt composition potentially implies that countries with low official multilateral and bilateral debt under consideration may not benefit much from the initiative; and other creditor participation remains largely uncertain.
d. Restrictive conditionality may hurt more — especially for countries with sizable access to international capital market funding – since countries accessing the DSSI will have to comply with IMF /World Bank ceilings on non-concessional borrowing.
Debt Management in Ghana: A Historical Perspective 6.