The banking sector is a critical component of our economy and contributes significantly to its growth. When governments, especially the Central Bank fail to pay attention to this sub-sector of the economy, the end result is the collapse of the economy, with its negative effects on the people. When the banking sector breaks down, the economy tumbles, and puts the government in a dire stead, making the people vulnerable.
The 2007 financial crises in the United States, did not only affect the American economy, but also the global economy. That is why governments have to always ensure that the financial sector is stable to ensure an efficient and successful running of the economy.
The intervention of the Bank of Ghana that allows the GCB Bank to take over the UT and Capital Banks that were distressed is a step in the right direction, and the government should be commended. The timeous rescue of these distressed banks defines the competence of those at the helm of the apex bank, and underscores the commitment of the government in protecting jobs, and employees from the unpleasant outcome of job losses.
As we commend the government for this timely and necessary intervention, we would like to also emphasize that she can do more to ensure that the financial sector operates in an environment of economic stability. We encourage the government to work assiduously to achieve a sustainable macroeconomic outlook that will further boost investor confidence, encourage the private sector to invest in critical sectors of the economy so as to expand it to create more jobs for the masses, especially the youth.
When the economy expands with the creation of more jobs, prices of goods and services coming down, inflation reducing; disposal income of the people could further help businesses to grow, thereby creating more jobs for socioeconomic development. This will also enable banks to lend to businesses and other customers at reasonable rates, lowering their risks of bad debts.
Dr. Kingsley Nyarko