Vice President of IMANI Africa, Bright Simons, has expressed concern over the previous government’s decision to prosecute the former Deputy Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, who is currently nominated for the position of Governor.
Simons described the move as “bizarre,” noting that the previous government turned policy issues into criminal indictments against Dr. Asiama.
Speaking on NewsFile on Joy FM on Saturday, February 15, 2025, Bright Simons explained that the decision to prosecute should not solely be based on legal grounds, as public policy considerations also play a significant role.
“The decision to prosecute or not is not entirely legal because there are many public policy considerations involved. This matter, specifically Dr. Asiama’s trial, is particularly interesting because, in the banking and finance sector, it’s not just legal issues that matter. There are also significant concerns related to macro-fiscal stability. The current Governor of the Bank of Ghana (BoG) was executing a policy that his colleagues at the BoG agreed with: using the Emergency Liquidity Programme, a fund set up to support banks facing liquidity challenges, to prevent banks from failing.
“There are two types of liquidity provisions in this context: emergency liquidity, which can last up to three months, and intraday liquidity, which is crucial. Intraday liquidity means that if a bank is failing to settle transactions, the central bank can step in to ensure the overall banking system continues to function smoothly. When, for example, a payment is made from an account at Bank A to someone at Bank C, a settlement process is needed because the accounts are held at different banks. Typically, the central bank manages this settlement process by debiting the relevant accounts,” he explained.
Simons continued, “If the bank being debited doesn’t have sufficient funds in its settlement account, it could lead to payment failures, which could create significant distress across the entire financial system. So, given these factors, if a decision is made to prevent contagion in the banking sector by giving liquidity support to Unibank through UMB, since Unibank didn’t qualify for direct support at the time—this was a policy decision. With all of this in mind, how do you prosecute a deputy governor for making such a decision? I found that very difficult to understand.”
He also pointed out that in the banking and finance sector, factors such as macro-fiscal stability are equally important as legal issues.
Simons elaborated on the policy decisions made during Dr. Asiama’s tenure at the BoG, including the Emergency Liquidity Programme designed to support banks facing liquidity challenges.
He explained the two types of liquidity provisions used by the central bank: emergency liquidity, which can last up to three months, and intraday liquidity, which is critical to preventing payment failures within the banking system.
Simons noted that, at the time, the BoG decided to provide liquidity support to Unibank through UMB, as Unibank did not qualify for direct assistance. This decision was made to prevent contagion in the banking sector, a policy he believes was valid.
However, Simons questioned how such policy decisions could lead to the prosecution of a deputy governor like Dr. Johnson Asiama.
He further criticized the previous administration’s stance on the UT Bank matter, where the former Attorney-General argued that the central bank’s liquidity support violated the single obligor limit.
“Regarding the UT Bank matter, where the former Attorney-General suggested that the central bank’s payment of GH¢460 million violated the single obligor limit, I struggled to understand this argument. The single obligor rule applies to banks to prevent them from lending too much to one borrower, thereby concentrating risk. However, the central bank is not obligated to follow this rule when providing liquidity assistance to a bank. So, I didn’t understand why the central bank’s GH¢460 million payment to UT Bank would be considered a violation,” he lamented.
Simons further pointed out that the central bank is not bound by the single obligor rule when providing liquidity assistance to banks in distress.
“If UT Bank had been giving out that amount of money and breached the single obligor limit, I would understand, but that would not involve the central bank. The current argument suggests that the previous administration was lax because the asset quality review conducted in 2015 and 2016 did not hold some banks accountable. While we all have policy disagreements, it’s important to remember that the law granting the BoG its powers was passed in September 2016, long after the issues at hand. This means the central bank didn’t have the necessary tools at the time to address the situation as the following administration did. Turning these policy decisions into criminal charges is simply bizarre,” he explained.
Bright Simons also referenced the ongoing debate surrounding the prosecution of officials involved in the banking sector crisis.
Former Attorney-General Godfred Yeboah Dame had recently criticized the discontinuation of several high-profile criminal cases by Dr. Dominic Ayine, his successor.
Dame described the decision as alarming, stating that it prioritized the interests of defense lawyers over those of the republic.
Godfred Dame emphasized that these cases involved significant losses of taxpayer money and were linked to the banking crisis that had a serious impact on Ghana’s economy.
He expressed concern that such decisions could be detrimental to the public interest.
In response, Bright Simons called out the decision to turn policy matters into criminal cases, describing it as “bizarre” and suggesting that it lacked a proper understanding of the broader economic context.
He also pointed out that the laws used during the resolution of these issues were passed after the events in question, meaning the central bank did not have the necessary tools at the time to address the situation in the way that the subsequent administration was able to.
MA
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