Accountability and transparency in GAT’s operations 

The Ghana Amalgamated Trust Plc (GAT) was initially conceived as a public policy intervention to stabilise Ghana’s financial sector by supporting struggling local banks. However, despite its substantial capital injection and mission to serve the public good, GAT’s recent response to critical questions surrounding its operations appears confrontational rather than transparent. 

As a public entity managing substantial government funds, GAT must uphold transparency, accountability, and fidelity to its founding principles. This article clarifies and expands on key concerns raised in our publication, underscoring GAT’s need to operate openly and in alignment with its public mandate. 

There is also a need for a full disclosure of GAT’s activities and a parliamentary review to assess its adherence to the goals for which it was established.

GAT’s role as a public policy instrument

GAT’s establishment in 2018 was a direct response to the pressing need for financial stabilisation after Ghana’s 2017-2018 banking crisis. 

Positioned as a vehicle to rescue local banks, GAT was approved by Parliament and funded with GH¢800 million in government capital to prevent the collapse of these banks, protect jobs, and preserve local ownership. 

As a public policy instrument, GAT’s operations and outcomes should be transparent to both Parliament and the Ghanaian public, to whom GAT owes its existence and its funding.

However, GAT’s current operations appear to deviate from its original mission. Rather than functioning solely as a public policy mechanism, GAT’s structure has shifted towards a private equity-style model, where the focus appears to be on generating returns and consolidating ownership rather than directly supporting the beneficiary banks. 

This deviation raises important questions about GAT’s objectives and whether it remains committed to its mission as a public policy tool. Parliament and Ghanaians deserve answers about the nature and impact of this shift.

Selective support and the exclusion of local banks

When GAT was launched, it was expected to operate inclusively, helping as many local banks as possible to comply with new capital requirements and stabilise their operations. 

Yet, only a select few banks received GAT’s support, leaving many others without access to the capital assistance necessary to survive. The banks excluded from GAT’s funding were effectively left with two options: attempt to meet the capital requirements independently, or face licence revocation by the BoG. 

For those that could not raise the required capital on their own, their licences were revoked, forcing them to cease operations or merge into government-led entities such as the Consolidated Bank Ghana (CBG).

This selective support process has prompted scrutiny over GAT’s role as a public policy tool. As a vehicle funded by government capital, GAT should, in principle, have applied fair and transparent criteria for selecting beneficiary banks. 

The exclusion of certain banks from intervention has led to significant consequences, including job losses, loss of shareholder value, and a reduction in the overall competitiveness of Ghana’s banking sector. The absence of transparent criteria has further fuelled questions about whether GAT’s funding allocations were influenced by factors beyond financial stability, potentially including political motivations.

Despite the pressing issue of excluded banks and the subsequent revocation of their licences, GAT’s public responses have remained silent on this aspect of its operations. This lack of transparency has led to frustration among stakeholders, who question why GAT, as a publicly funded instrument, has not addressed its selection process for beneficiary banks. 

The absence of a clear explanation has left the public and Parliament in the dark about why some banks were deemed worthy of support while others were left to fail, despite facing similar financial challenges.

This silence not only undermines GAT’s credibility as a public policy tool but also diminishes trust in its commitment to safeguarding the local banking sector. As an instrument supposedly intended to serve public interest, GAT’s accountability to the public should include an explanation of how and why it chose specific banks for intervention while excluding others. By avoiding these questions, GAT’s actions cast doubt on the fairness and transparency of its support criteria, raising the question of whether its decisions were influenced by motives outside of financial need.

The selective intervention approach of GAT, combined with its silence on the exclusion of other local banks, has led to speculation about potential political motivations driving its actions. Given the government’s direct involvement in GAT’s ownership through the National Trust Holding Company (NTHC), questions have arisen about whether GAT’s funding decisions were influenced by political considerations rather than purely economic or financial stability factors.

For instance, the local banks that were denied support may not have had the same political affiliations or influence as those that received funding. This has raised concerns that GAT’s interventions may have been strategically targeted to consolidate control over certain banks while allowing others to fail. 

The result has been a shift in the competitive landscape of Ghana’s banking sector, with a greater concentration of control in government-backed institutions, further diminishing the presence of indigenous ownership in the financial sector.

In a democratic society, a public policy instrument funded by taxpayer money should be devoid of political bias. GAT’s apparent selective approach and its lack of transparency on this matter contradict the principles of fairness and accountability that are expected of a public institution. The BoG’s revocation of licenses from banks excluded from GAT’s intervention further compounds these concerns, as it suggests that the government may have used GAT as a mechanism to exert influence over the banking sector, shaping its structure in a way that aligns with specific interests rather than the broader public good.

Transparency and reporting to Parliament

Since GAT’s establishment, it has yet to deliver a comprehensive report to Parliament regarding its activities, outcomes and financial position. 

This lack of transparency is concerning, particularly because GAT is managing public funds intended to stabilise Ghana’s banking sector. 

Parliament, as the body that approved GAT’s creation, should demand regular status reports from GAT to ensure that it operates in accordance with its mandate.

Without transparent reporting, GAT’s operational model and financial decisions remain hidden from public scrutiny. The absence of a status report raises questions about GAT’s effectiveness and accountability. 

A full report to Parliament would allow for an assessment of GAT’s performance, the impact on beneficiary banks, and the returns generated from the GH¢800 million public investment. It is time for GAT to provide this information, as Ghanaians have a right to know how their funds are being used.

Funding sources and shift to a private equity model
GAT’s initial capital came from public funds, specifically allocated to provide equity support to local banks. Yet, instead of functioning transparently as a public entity, GAT has adopted a private equity-style approach, raising significant concerns.