WHY OUR GOVERNMENTS CAN’T ALWAYS PAY THE VICTIMS OF SCAMS Featured

By Emmanuel Appiah Kubi January 16, 2019 298 43 comments

In 2014, the government sought to compensate the victims of the DKM financial scam following lapses in regulation and supervision by the old-style Bank of Ghana.

There was a total breakdown of law and order in Ghana’s financial sector at that time. Institutions mandated by law to regulate and supervise our banks and other financial institutions went wayward and nobody knew why. The interests of DKM’s victims were at the mercy of schemers.

The then candidate Nana Addo Dankwa Akufo-Addo had no choice other than to share in their plight by promising to mitigate their losses should he win the 2016 election.

This is a promise that the government is seeing through to fulfilment. It voiced, in a public setting, its intention to fulfil the promise when the Minister of Finance, presenting the 2019 Budget statement in Parliament, indicated that roughly 80 per cent of funds owed to customers of DKM had already been settled.

Bailout = bad signal

However, Peter Quartey, a professor of economics at the Institute of Statistical, Social and Economic Research (ISSER), pointed out in a Ghanaweb business news publication of December 6 2018 that “bailing out victims of financial scams sends bad signals; it will embolden other victims of similar scams to demand help from government; it will also threaten governments’ fiscal position’’.

It can also be argued that it will encourage many other people to indulge in similar acts; after all, the government will step in to mop up the mess when their actions backfire. If not curtailed, this attitude will always put Ghana’s financial sector in crisis; an unpleasant position for the nation as we prepare to take off and become financially independent.

The goals of the Ghana Beyond Aid agenda will be defeated if we continue to entertain acts of this nature.

The political play of seeking to equalise Menzgold with DKM will not wash, because the scenarios and circumstances differ. We politicise everything in this country. Somebody should tell the whole of Ghana where and when ever President Akufo-Addo endorsed Menzgold.

Forewarned, forearmed

We all know Menzgold has been around for a while, launching well before President Akufo-Addo took the reins of power in Ghana.

We should commend the President, rather than subject him to crucifixion by media and mischief-makers. It is his mission to clean up the financial sector which resulted in the exposure of Menzgold’s operations.

We must remember that personal security is everyone’s personal responsibility. Nobody can do it better than ourselves. What the system and the environment can do to help is to advise and caution whenever necessary.

It is an indisputable fact that Menzgold’s customers were forewarned and cautioned severally by the Bank of Ghana (BoG), Securities and Exchange Commission (SEC) and Precious Minerals Marketing Company (PMMC).

Some decided to heed the advice: others did not, and thereby hangs this tale.

Mouth-watering dividends

For once, in the case of Menzgold, panic withdrawals did not happen when news emerged about the company’s possible closure. The victims took no independent action to safeguard their investments with the gold dealership.

If indeed the victims think they did legitimate business with Menzgold, they should proceed to court to reclaim their investments, rather than look to the government to cough up monies that they knowingly and willingly invested with a company of no sound basis.

It is difficult to grasp what more these victims want from the government, after defying several warnings from the regulatory bodies.

An attitude of investing is vital to the growth of any economy, just as it is in individuals’ lives. That said, it needs to be done in a manner seen not as haphazard, but as prudent. It is not prudent on anybody’s part to throw their lifetime savings into an investment fund they have not thoroughly investigated.

What personal checks did any of the victims carry out before deciding to invest with Menzgold? Before we invest in any venture as individuals, it is only to be expected that we are clear about the integrity and credibility of the investment or investment institution. We must not get carried away merely by the mouth-watering interest the investment promises to offer.

Firm resolve

Going forward, we must become responsible as citizens for our own actions.

We must check and double-check before we throw our lifetime savings into high-risk enterprises. Our government cannot compensate the victims of Ponzi schemes for their losses as a matter of routine, and especially not if they could have avoided those losses, as Kofi Bentil of IMANI has argued.

Our government must stand firm in its resolve not to pay a dime to settle anybody’s loss.

Our leaders in Ghana must take a firm stand, rather than allow the political impact of such schemes on governments during elections to determine how they act.

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Last modified on Wednesday, 20 March 2019 05:55

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