Former Finance Minister warns political colouring of court verdict could unravel hard-won banking reforms
A court victory. A celebration. And a very serious warning that nobody in government seems to want to hear.
When the Court of Appeal in Accra last Thursday unanimously restored the operating licence of GN Savings and Loans Company Limited, NDC government officials and surrogates wasted no time rushing to social media and radio studios to credit President John Mahama for the outcome. It was triumphant. It was political. And according to former Finance Minister Anim Adam, it was deeply disturbing.
“This ruling is not just a legal development,” Adam wrote in a widely circulated commentary this week. “It is a major financial-sector policy event with implications for regulatory credibility, macroeconomic stability, and Ghana’s post-IMF program outlook.”
Those are not the words of a man splitting political hairs. They are the words of someone who understands exactly what is at stake for the country.
The backstory the NDC does not want you to remember
The 2017 to 2019 banking sector clean-up under the Akufo-Addo administration was painful. Nobody disputes that. On August 16, 2019, the Bank of Ghana, then under the leadership of Dr. Ernest Addison, revoked the operating licence of GN Savings and Loans Company Limited and appointed Eric Nana Nipah as Receiver as part of the banking sector clean-up exercise. The High Court later agreed, ruling that governance deficiencies had rendered GN Savings and Loans incapable of meeting its debt obligations and that the company had failed to prove it was solvent at the time its licence was revoked.
The NPP government paid a heavy political price for that exercise. But it did not flinch because the alternative, leaving weak, poorly governed institutions in the system, would have been far worse for ordinary depositors and the broader Ghanaian economy.
Adam acknowledges all of this and places it squarely at the centre of his argument. The clean-up, he notes, was carried out against a banking system carrying weak capital, poor governance, related-party exposures, liquidity pressures, and institutions that simply could not meet prudential requirements.
The problem with political triumphalism
Here is where the story gets uncomfortable for the NDC.
At the launch of the NDC’s 2024 manifesto on August 24, 2024, John Mahama had vowed: “In the first 120 days of office we shall restore the operations of all wrongly collapsed banks and financial institutions.” He had described the licence seizure of Groupe Nduom as a hasty action and promised an independent review of the entire banking sector cleanup.
Now the Court of Appeal has delivered a ruling that, conveniently or otherwise, aligns with that promise. And government officials are publicly crediting the president for it.
Adam is direct: “This is where the risks begin.”
Five alarms that demand national attention
The former minister does not stop at criticism. He lays out five concrete risks with the precision of someone who spent years managing Ghana’s finances.
The first is regulatory credibility. If licence revocations undertaken on prudential grounds can be reversed years later without a transparent, rigorous supervisory reassessment, market participants will begin to doubt the finality of regulatory action. That, Adam argues, weakens deterrence and encourages failed institutions to treat resolution as a political negotiation rather than a prudential outcome.
Chartered Banker and Accountant Nana Obiri Yeboah has echoed this concern, warning that the ruling challenges the legal foundation of the central bank’s banking sector clean-up and could open the floodgates for a wave of costly lawsuits against the regulator.
The second risk is moral hazard. The entire purpose of the clean-up was to send a clear message: weak governance, insolvency, and depositor risk have consequences. If those consequences can be reversed when political conditions change, what message does that send to future bank owners?
The third risk is fiscal. Ghana is emerging from an IMF Extended Credit Facility arrangement with very limited room to absorb new liabilities. Adam warns that if other revoked institutions now pursue similar claims, the state could face compensation demands, asset-return disputes, depositor settlement issues, and recapitalisation pressures. The timing could not be worse.
The fourth risk is financial stability itself. A restored licence, Adam insists, cannot mean an automatic return to business. Before any operational restart, there must be a fresh fit-and-proper assessment, a capital adequacy review, asset quality verification, liquidity assessment, governance review, and a depositor protection plan. Anything less would expose ordinary Ghanaians who deposit their savings to avoidable harm.
The fifth risk, perhaps the most consequential, is Ghana’s post-IMF credibility with investors and development partners. “Investors and development partners will ask,” Adam writes, “whether Ghana’s reforms are durable or reversible.” If core financial-sector decisions can be reopened through political pressure, the signal to the market is damaging, full stop.
What must happen now
Adam’s commentary is not simply a critique. It is a call to action addressed directly to the Bank of Ghana and the Ministry of Finance.
He demands three immediate steps. First, the Bank of Ghana must issue a clear public explanation of the regulatory implications of the ruling and confirm whether it intends to appeal. Second, before any restored licence becomes operational, the Bank of Ghana must conduct and publish the conclusions of a fresh prudential assessment covering capital, liquidity, governance, asset quality, and risk management. Third, the Ministry of Finance must disclose all fiscal exposure arising from the ruling, including compensation, depositor liabilities, receiver costs, and recapitalisation implications.
None of these demands are unreasonable. All of them are urgent.
The bottom line
Ghana spent enormous resources cleaning up its banking sector. According to the IMF, about GH¢15.75 billion representing 5 percent of GDP was spent by the government in funding that exercise. That was taxpayers’ money. It bought Ghana a cleaner, more stable financial system. It bought Ghana credibility with international partners. It bought Ghana the platform on which the current government now stands.
Anim Adam’s message is simple but profound: a court order must be respected, yes. But financial stability is not a campaign promise to be handed out at a manifesto launch. It is a national asset, built with pain, protected with discipline, and belonging to every Ghanaian, not just those who voted for the winning party.
The Bank of Ghana and the Ministry of Finance would do well to listen.
