Economist Intelligence Unit says some investment banks in Ghana will be shut down by the end of August

According to the unit, the shutdown will be effective before the end of August.

The EIU disclosed the information in its August 2019 country report.

“Conclusion of a forensic audit by the Securities and Exchange Commission (SEC): a number of investment firms are likely to be shut down, and others restructured or re-capitalised, following the audit of the banks’ fiscal positions,” the report said, adding that “Cleaning up the nation’s Gh25 billion fund management industry became necessary after a recapitalization exercise by the central bank exposed weaknesses in the system.”

The EIU further noted that “While the drive strengthened the banking industry and reduced the number of lenders by almost a third, the early stages of the programme spurred panicked withdrawals from depositors trying to access their savings, drying up liquidity among fund managers.”

Meanwhile, SEC has been probing several investment firms for the misapplication of some GH¢5 billion in risky investments.

The Deputy Director-General at the Securities and Exchange Commission, Daniel Kahl said the funds are stuck in short-term unlisted bonds, direct private-equity stakes and related-party deals for small- and medium-sized businesses.