A professor of Financial Economics at the University of Ghana Business School says there is now a credible path to restoring Unibank’s license.
This follows government’s move to consider non-conviction asset recovery and the Attorney-General’s new 60% recovery threshold in the banking sector prosecutions.
Laud Mensah, speaking on JoyNews’ PM Express, said he supports the idea of bringing Unibank back into operation, especially after examining the events from 2017 to date.
“Yes, I foresee that,” he said when asked whether a restoration of Unibank’s license is now plausible. “Because if you take in our banking space, we are looking out for a situation where it will be dominated by local ownership.”
He explained that although the collapsed bank faced serious liquidity and solvency problems, the funds that contributed to its downfall were not lost to the country.
“The reason why I’m comfortable with the non-conviction-based asset recovery is that, let’s look at the happenings holistically. Whatever money that was taken out as a result of creating the liquidity and solvency problems—those monies were invested in the country.”
He argued the challenge was not outright fraud or capital flight but poor allocation of funds within the local economy, which ultimately hurt the bank’s immediate financial health.
“The only problem is that it wasn’t invested appropriately to meet the liquidity needs of the bank. And so there is that kind of multiplier effect within the economy as a result of the losses that the banks made.”
According to Prof. Mensah, the state must take a broad view of the economic consequences and the opportunity for course correction.
“So if you are taking the government into perspective, then obviously recovering part of it, and then possibly documenting the possible ways that brought about the losses, and again, ensuring that it is not repeated…”
He said, based on the experience gained, a second chance for Unibank is both defensible and practical.
“I will say, with experience and then the little assets that the Unibank has, it won’t be wrong to restore the alliances and go back into operation.”
Prof. Mensah insisted that Ghana’s regulators and financial institutions have learned a lesson that should not be wasted.
“At least a lesson has been learned. And going forward, we know how to approach such situations from the bank’s perspective, and then also from the regulators’ perspective.”
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