Now that we have finished mourning Ahmed (as a Moslem) and the CID have commenced investigations into his gruesome murder, Let’s come BACK to MENZGOLD!
Yes MENZGOLD, it is the singular most complex and biggest Ponzi scheme to rock this country (and it seem to have enjoyed some form government’s complicity).
For the NPP government and its supporters, I am bias, YES I KNOW.
In Ghana you cannot criticize the ruling government ONLY.
You have to criticize the ruling government and the opposition parties at the same time to make you NEUTRA!
Yea i know, but the problem is that I don’t pay taxes to the opposition parties, the opposition parties haven’t sworn any oath to protect and defend this country and infact the opposition parties are NOT in charge of this 30 billion economy.
Unless the opposition parties are engulfed in any unethical behaviours that threatens the stability of this country, don’t ask us to move our accountability lenses off the ruling government unto opposition parties.
We’d rather be labeled “BIAS” than to be on the side of government as civil society.
And when the government does anything good in this remaining 24months trust us to point it out and commend them appropriately but until then feel free to call me “BIAS”!!
Now back to the substantive issue, GOVERNMENT’S decision NOT to intervene in the looming MENZGOLD crisis was deliberate.
Hell YES, And I will tell WHY……Because the ONLY beneficiary of this liquidity crisis in the economy now is government!!
In the NPP manifesto, the President had promised to move the focus of the economy from taxation to production.
Clearly that would have been the best, BUT unfortunately the government had to introduce some business unfriendly fiscal policies in an attempt to meet the capital demand for the free SHS program.
The consequences of these policies were so dire that it practically suffocated Ghanaian businesses and eventually brought the manufacturing/production sub-sector to its knees (most businesses could not break even and had to start laying off workers)
The ban on small scale mining was also a huge factor, small scale mining apparently was driving the informal sector.
The liquidity these miners brought to the economy was immeasurable.
At this point it was uncompetitive to invest in the production sub-sector anymore, check the amount of NPL in 2017 and 2018.
SME’s couldn’t pay back their indebtedness to the banks.
Now the ONLY option for people holding cash was to invest in securities and properties.
Then all of sudden MENZGOLD came with a rather lucrative scheme.
Just deposit your money, and every month get 7-10% of it as interest withdrawable every month.
How cool, you get to skip all the hussle and bustle of doing business in Ghana.
No operating cost, seemingly No Risk at all.
So the monies that were supposed to go to financial intermediaries like banks and Insurance companies and then to SME’S as credit were finding their way into MENZGOLD.
Can u imagine if all these monies being mentioned as monies locked up in MENZGOLD were invested in production?
The effect is that supply of goods and services would have gone up tremendously bringing down prices of goods and services and eventually inflation.
Once goods and services were cheaper and affordable optimally demand will also shelve up, businesses would sell more, make more revenue , expand and employ more.
Government would also benefits from extra income through taxes.
This is basic economics….
But instead government watched on whiles monies that should have gone into production went into MENZGOLD, investors started moving their monies from banks due to the poor handling of the financial sector crisis that led to loss of confidence in the banking sector and guess what, all those monies found their ways into MENZGOLD.
Unfortunately MENZGOLD did not have the mechanism and framework to reinvest those huge monies back into the economy through well structured credit facilities for SME’S because they were NOT licensed to provide any form of financial intermediation.
Now as a sensible, upon realising that the rate at which MENZGOLD was growing it could collapse the financial sector totally in 3 years if allowed to continue, what do you do?
Sorry sensible was too harsh…as a responsible government what do you do?
You quickly ask the central bank to take over MENZGOLD and supervise the reimbursement of customer’s monies to them (PRINCIPAL ONLY)
Only after the last person have been paid, then you close MENZGOLD down.
Now the managers of the economy were so scared that if customers were paid these huge sums of monies, they would not be able to control the money supply in the economy anymore.
Mind you the production subsector had declined, more money in circulation could push inflation to digits within months.
This could erase the “cosmetic” microeconomic stability government have achieved and touted to the IMF.
So the only way to protect government’s inefficient economic management was to allow MENZGOLD to hold on to customers CASH at least for NOW.
Releasing CUSTOMERS money could have a tolling effect on the economy and that could seriously bring government on its knees.
Same way government has deliberately refused to pay contractors to check liquidity and inflation in the economy.
Same way it has imposed high import duties at the port is to check the Balance of Trade and shelve the exchange rate through reduced imports.
(But this could be good be a policy if met with the accompanying production locally to make up for the gaps in supply).
Otherwise importers would pass on the high tariffs on to consumers who may have absolutely NO cheaper alternative and this will ultimately raise the cost of living in the economy.
Certainly government is achieving economic figures, YES but NOT through any prudent economic management but dubious means and the effect is the unprecedented hardship in the economy amidst those excellent economic figures.
For MENZGOLD customers your only HOPE and PRAYERS now should be directed at the One District One Factory Policy, that real factories should be built in the next few months, one way or the other production should shelve up supply dramatically and just maybe government would be comfortable asking MENZGOLD to release your cash to you without eroding its impressive “cosmetic” economic succesess!!!
I for one will definitely remember you in my prayers!!
Executive Director, ASEPA.