Allow Ofori Atta to pursue his agenda – Frank Adu
Frank Adu Jnr., Managing Director of CalBank, has come to the defense of the Finance Minister, Ken Ofori-Atta, over the directive to commercial banks in the country to transfer all government accounts and monies to one central account at the Bank of Ghana (GoG) called Treasury Single Account (TSA).
“I think that Ken Ofori-Atta, as Finance Minister, should be given the opportunity to prosecute his agenda to its final conclusion. Let’s give him time and we will see how it will pan out,” Mr. Adu told the B&FT after his bank unveiled a new logo.
The Public Financial Management Account (PFMA), Act 921 established the Treasury Single Account (TSA) to serve as an account into which all government cash, including monies received by covered entities, be deposited and from which all expenditure of government and entities shall be made.
When the Finance Minister commenced the implementation of the TSA in July to improve the management of state funds, local banks in the country, in a statement, said they are unable to comply with the directive.
But Mr. Adu is of the view that if a bank concentrates on government for deposit then it will be affected by this directive but once a bank’s deposit base is properly diversified one needs not to be worried.
“If he believes that this is one of the ways of optimising the resources of the country so that he will bring some sanity to the macroeconomic environment, let us give him the chance. Do not second guess him. If down the line, he finds out that it is not the right policy, knowing Ken, he will change it,” he said.
Mr. Adu stated that it wasn’t fair for banks to collect monies from institutions like GETFund or the Accra Metropolitan Assembly (AMA) and just purchase government Treasury Bills.
“What Ken Ofori-Atta is talking about are the Metropolitan Municipal District Assemblies (MMDAs), the ones drawing on the consolidated fund. Why should he give you money from GETFund or Accra Metropolitan Assembly (AMA)? The day after he gives it to you, you turn around and go and buy Treasury Bills. I think people should understand,” he added.
He explained that State Owned Enterprises (SOEs) including the Ghana Airports Company, Volta River Authority (VRA) and others are not part of the initial arrangement.
“I do not think that those companies are part of the list. If I have made a loan to Ghana Airport Company and the agreement requires of it to give me certain portion of its cash-flow, they will give it up.
We had a meeting with Ken Ofori-Atta on the subject and he is not going to disrupt existing financial agreements. VRA borrows extensively from the banks. GPHA, and others are all SOEs and in law they are limited liability companies with a single shareholder,” he added.
An audit carried out last year indicated that the value of government funds held by commercial banks stood at a little over GH¢6 billion, in 6,000 accounts.
But at the last count, in May 2017, the audit showed that the public sector deposits and cash assets with the banks reduced to GH¢3 billion, which is about 6percent of the banking sector’s deposits which totaled GH¢53.2 billion.
The implementation of the initiative has led to a series of consultations on how to carry out the process but still minimizing the “potential shock” and “liquidity imbalance” that it will cause to the banking sector.