By Daniel Bampoe
Former Finance Minister and Member of Parliament for Karaga, Dr Mohammed Amin Adam, has raised serious concerns over the recent Court of Appeal judgement ordering the restoration of the licence of GN Savings and Loans, warning that the decision could have far-reaching implications for the financial sector, investor confidence, and post-IMF economic recovery efforts.
In a strongly worded statement, Dr. Amin Adam criticised what he described as attempts by some government officials to credit President John Dramani Mahama for the court’s decision, insisting that such political commentary risks undermining the independence and credibility of the financial regulatory framework.
According to the former Finance Minister, the Court of Appeal’s ruling should not be viewed merely as a legal matter, but rather as a major financial-sector policy development with significant consequences for macroeconomic stability, regulatory discipline, and the international economic reputation.
He argued that the case has emerged within a politically sensitive environment because President Mahama had publicly promised during the 2024 election campaign to restore the licences of financial institutions he believed were “wrongfully collapsed” during the banking sector clean-up exercise undertaken between 2017 and 2019.
Dr. Amin Adam noted that the banking sector reforms initiated under the previous administration were implemented at a time when the financial system was facing severe distress, including weak capitalisation, liquidity challenges, poor corporate governance, related-party transactions, and widespread breaches of prudential requirements among several banks and specialised deposit-taking institutions.
He recalled that the International Monetary Fund (IMF) had acknowledged in 2019 that the Bank of Ghana resolved nine insolvent banks as part of efforts to stabilise the financial sector and restore confidence in the banking system.
He also referenced the PwC Ghana Banking Survey, which described the revocation of licences as necessary steps toward strengthening the sector and protecting depositors.
The former Finance Minister stressed that while court rulings must always be respected in a constitutional democracy, the more critical issue is whether reversing revoked licences years later, particularly in a politically charged atmosphere, could weaken confidence in the bank resolution framework.
He warned that the ruling presents several major risks to the economy and the financial system.
According to him, the first concern is regulatory credibility. He argued that if financial institutions whose licences were revoked on prudential grounds can return years later without undergoing rigorous and transparent supervisory reassessments, market players may begin to question the finality and authority of regulatory actions by the central bank.
He further warned of a growing moral hazard risk, explaining that the banking sector clean-up sent a strong signal that insolvency, weak governance, and depositor exposure would not be tolerated.
However, if institutions now perceive that political changes can overturn regulatory sanctions, future operators may treat financial regulation as a political negotiation rather than a strict prudential process.
Dr. Amin Adam also highlighted the possibility of fiscal risks to the state. He cautioned that if other collapsed financial institutions pursue similar legal claims, the government could face significant compensation demands, disputes over returned assets, depositor settlement obligations, and even recapitalisation pressures at a time when Ghana is still recovering from economic difficulties under the IMF-supported program.
He added that Ghana currently has limited fiscal space and cannot afford new contingent liabilities that could place further strain on public finances.
On financial stability, the former minister insisted that a restored financial institution cannot simply resume operations based solely on a court ruling. He maintained that before any operational reinstatement is allowed, regulators must conduct comprehensive assessments covering capital adequacy, liquidity levels, asset quality, governance structures, risk management systems, and depositor protection arrangements.
He argued that any failure to undertake such rigorous reviews could expose depositors and the broader banking system to unnecessary vulnerabilities.
Dr. Amin Adam also linked the matter to the international credibility following the country’s recent IMF economic support programme.
He said investors and development partners would closely monitor whether the institutional reforms are sustainable or subject to political reversals.
According to him, reopening key banking sector decisions through perceived political influence could send damaging signals to international markets regarding the consistency and independence of the financial governance system.
The former Finance Minister further cautioned that if the restoration of GN Savings and Loans’ licence is viewed by the public as the fulfilment of a political campaign promise rather than the outcome of an independent prudential process, it could raise serious concerns about whether financial-sector policy in Ghana is being guided by technical supervision or political considerations.
Dr. Amin Adam therefore called on the Bank of Ghana to immediately clarify its position on the Court of Appeal ruling, including whether it intends to challenge the decision through further legal action.
He also urged the central bank to conduct and publicly disclose the broad conclusions of a fresh prudential assessment of the institution before any operational restoration takes effect.
In addition, he called on the Ministry of Finance to disclose any potential fiscal exposure associated with the ruling, including possible compensation claims, depositor liabilities, receiver-related costs, and recapitalisation implications.
Concluding his remarks, Dr. Amin Adam warned against what he described as the politicisation of banking regulation at a time when Ghana is working to restore economic confidence after years of financial turbulence.
“Financial stability is not a campaign promise. It is a national asset,” he stated
