The National Investment Bank (NIB) needs recapitalisation to strengthen it, based on which the Finance Minister has raised GH¢857 million to support the Bank’s operations to shore up profit.
Mr Frank Annoh-Dompreh, the Majority Chief Whip, said the Government had instituted some measures to enhance the Bank’s recapitalisation process to remain relevant in the current industrial drive.
“I think that the Government has done some good efforts, but it still stands to reason that because of the challenges in the financial sector, the Bank is still demanding some recaptilisation,” he said.
“Some more efforts, some more oxygen must be given so it will be able to work and remain relevant in our industrial derive,” he said at a press conference on Wednesday at Parliament House in Accra.
The Majority Caucus press conference was in response to an earlier one held some three weeks ago concerning the state of the NIB, led by Mr Isaac Adongo, the Minority Ranking Member on the Finance Committee, and NDC Member of Parliament for Bolgatanga Central.
During that conference the Ranking Member urged the Government to embark on restructuring of the NIB to prevent its liquidation, by painting a gloomy picture about its current situation.
Mr Annoh-Dompreh, also the NPP MP for Nsawam-Adoagyiri, said some of the issues raised by the minority were incorrect and that after the NIB’s financial statement audit for 2017/2018, it was determined that it needed some GH¢2.2 billion for recapitalisation.
Outlining some of the challenges, he said the Bank had had a high concentration of loans in the construction sector, though it was established to basically support the industrial sector of the economy.
“The situation had been that the NIB Management inherited the situation where loan portfolios had been high; more than 90 per cent of the Treasury had been concentrated in the area of construction,” Mr Dompreh said.
He cited over GH¢ 500 million being placed as loans in the non-banking financial institutions.
The Bank recorded some losses from mismatches in the foreign exchange balance sheet resulting in huge daily revaluation losses, he said, with weak IT infrastructure and high cost of service contract.
It also experienced an astronomical ratio of staffing; saying: “We have 18 staff per branch against what is supposed to be the industry norm of 10 staff per branch”.
Mr Dompreh said the NIB Management had taken steps to work on the staffing situation, reversing it to the 10 staff per branch currently.
Touching on the Eland International lawsuit against the NIB, he said it was for various reasons and that the matter was heard in the apex court and ruled in favour of the NIB.
He said Eland again sought redress and went to a court in London and again the Board and the Management of the NIB litigated the matter there and was successful.
“As we speak they have been able to extinguish this matter; Eland was demanding an amount of $100 million dollars from the Bank,” he said.
“The financial sector has its own variabilities, so when one wants to make a statement on it, one needs to get his facts right.”
“It is never true that the Treasury of the NIB Bank is not functioning,” he said.
He said some GH¢500 million under the NDC regime was given out as loans to some non-financial sector institutions of which a lot had not been recovered.
“And so, the least our colleagues can do is at least be careful when you are commenting about a bank that is mandated by law to shore up and develop our industries,” Mr Annoh-Dompreh said.
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