As the 2024 elections approach, former President John Mahama has been garnering attention with his promise to rehabilitate failed banks if elected. While his promise may resonate with those affected by recent challenges in the financial industry, it is imperative that Mahama’s track record of financial management, especially in the DKM Diamond Microfinance scandal, be scrutinized.
In 2015, under the administration of John Mahama, Sunyani-based microfinance company DKM Diamond Microfinance Ltd, which was set up under his own administration, was suspended by the Bank of Ghana for serious regulatory breaches. The company was found to have operated a Ponzi-like scheme, misused customer deposits for lavish capital expenditures, maintained unsustainable interest rates and misreported transactions. This gross mismanagement caused serious liquidity problems and exposed the company’s serious financial deficiencies.
Despite the clear wrongdoing, the Mahama administration failed to address the crisis effectively. DKM’s operations were suspended and accounts frozen, but no substantial measures were taken to protect the funds of thousands of depositors who had entrusted the bank with their lifetime savings. The lack of decisive action and financial intervention has left countless Ghanaians in financial distress and eroded public confidence in the microfinance sector.
It was only under President Akufo-Addo’s administration that meaningful steps were taken to resolve the crisis. In 2020, the government committed to repaying frozen funds of DKM clients. By September that year, 74,000 active clients had been repaid in full, while 13,857 cases remained outstanding but were being actively addressed. This stark contrast in responses to the financial crisis highlights major deficiencies in Mahama’s governance and crisis management capabilities.
Mr. Mahama’s recent promises to rehabilitate failed banks must be critically scrutinized against his past record. If he failed to protect the interests of Dakkam depositors in 2015, how can Ghanaians be confident that he will be able to successfully handle similar financial challenges in the future? His administration’s failure to act swiftly and effectively during the Dakkam crisis calls into serious doubt his promises and his ability to manage the country’s financial sector.
As voters ponder their choices in the 2024 elections, it is crucial that leaders are held accountable for past actions. Mahama’s track record at DKM Diamond Microfinance clearly demonstrates his deficiencies in financial oversight and crisis resolution. Ghanaians need leaders who have demonstrated the ability to protect their economic interests and navigate economic challenges with competence and integrity.
In the face of empty promises, voters must demand evidence of accountability and real competence. The disaster of DKM under Mahama is a sobering reminder of the importance of informed voting and the need for leaders who deliver on promises with real, tangible deliverables and not just words.
The two events are different scenarios but the principles of solving the problems cannot be different. If Mahama could not solve the problem of just one microfinance company, how could he solve the problem of five banks? I can only speculate like you.
Source: Edmund Kyei
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