By Moses Mozart Dzawu
Closure of 53 fund managers affects more than 70,000 savers
Country under pressure to rein-in spending ahead of 2020 polls
Ghana has been asked to provide more money to bail out investors who risk losing most of their savings, heaping pressure on a government struggling to put a lid on its expenses.
The nation’s Securities and Exchange Commission on Friday shut down 53 money managers overseeing about 8 billion cedis ($1.4 billion) for infractions including absconding with clients funds.
That has spurred the SEC to ask the government to increase its support from an initial pledge of 1 billion cedis, said Emmanuel Ashong-Katai, head of policy research at the regulator, without being more specific.
“Most of the funds were placed in investment avenues that are now difficult to retrieve,” he said. “Some were just not managed efficiently and honestly.”
The government’s debt load is being compounded by bailouts for failed lenders and liabilities for excess power and gas that Ghana doesn’t consume. The International Monetary Fund projects Ghana’s debt ratio will be about 63% of gross domestic product by the end of the year, compared with 51% in January.
More than 70,000 investors affected by the closures may either receive a fixed amount or a percentage of their holdings from the government kitty, Ashong-Katai said. Investors will receive additional payouts should liquidators appointed to wind down the funds retrieve anything, he said.