A heated dispute has broken out between the Ghana Amalgamated Trust (GAT) and veteran banking consultant Dr Richmond Atuahene over whether the government’s flagship indigenous bank support vehicle has morphed from saviour to strangler of the very institutions it was designed to rescue.
At the centre of the controversy is Dr Atuahene’s claim that GAT’s high-cost funding model — structured at a compounded 19.1 per cent annual interest rate plus a one per cent management fee — has plunged Universal Merchant Bank (UMB) and Prudential Bank into deeper financial distress, with one bank’s debt to GAT ballooning from GH¢243 million to nearly GH¢632 million in just five years.
But GAT has fired back, dismissing the assertions as “material inaccuracies” and insisting its interventions were commercially responsible and never intended as a permanent ownership arrangement.
The numbers debate
Dr Atuahene, a corporate governance and financial consultant, presented detailed calculations showing how the compounded interest on an initial GH¢243 million investment escalated from GH¢490 million by end-2023 to GH¢678 million by June 2025, severely hampering the banks’ ability to operate competitively.
“Data available showed that the 2023/2024 financial statements for two indigenous banks clearly revealed that those banks are financially distressed,” Dr Atuahene stated in his rebuttal to GAT’s rejoinder.
He argued that the cost of capital is “unreasonably too high” — particularly when compared to post-Domestic Debt Exchange Programme (DDEP) government bonds, which now carry a coupon rate of just 9.1 per cent.
“Please support your denial with data and figures, not narrative arguments and assertions. Ghanaians have the right to know this information — at least the cost of funding and computation,” he challenged GAT.
But GAT maintains that the portrayal of its capital support as a “19.1 per cent compounding debt burden” fundamentally misrepresents the actual structure of the instruments deployed.
“These instruments were designed during a period of heightened systemic risk following the 2017–2018 banking sector clean-up and were calibrated to reflect prevailing market conditions at the time,” GAT stated.
The Trust explained that the instruments included a mix of equity and preference share structures, not punitive compounding commercial loans. “Returns are formula-based and contractually governed. They are not open-ended compounding debt obligations as has been suggested,” it added.
Ownership fight
Another major flashpoint is the issue of indigenous ownership and control. Dr Atuahene argues that GAT’s structure has effectively disenfranchised local shareholders.
“Rather than providing capital support, the GAT intervention has been described as having worsened the financial positions of beneficiary banks, hindering their ability to remain solvent and competitive, and inability to support the local economy,” he stated.
He pointed to one indigenous bank where GAT’s stake has grown through annualised interest to 75.8 per cent ownership, effectively handing control of a once wholly Ghanaian-owned institution to the government-linked vehicle.
But GAT countered that it did not enter the programme to acquire controlling stakes. The initial structuring, it said, deliberately incorporated a mix of preference and ordinary shares to minimise dilution and avoid control concentration, with GAT taking minority shares in all the banks.
The Trust acknowledged that in one instance where it currently holds a majority stake, this arose during a subsequent recapitalisation phase in which existing shareholders were unable to inject the required capital.
“GAT provided additional support to prevent further deterioration of the bank’s capital position and to safeguard depositors’ funds and systemic stability,” it explained.
Pension fund fears dismissed
Dr Atuahene had earlier warned that the linkage between pension funds and the banking sector through GAT has created dangerous systemic risk, stating that if any of these banks collapse, pensioners’ savings would be directly hit.
GAT, however, firmly rejected this assertion, stating categorically that it has not issued bonds to pension funds nor mobilised private pension assets to fund its interventions.
“GAT has no funding arrangement with pension funds in the manner described. Any reference to a GHS2 billion pension-backed bond programme in relation to GAT is factually incorrect,” the Trust stated.
It clarified that GAT was capitalised by the Government of Ghana with GH¢800 million, which was deployed toward the recapitalisation of selected banks.
DDEP blame game
Both parties acknowledge the devastating impact of the 2022 Domestic Debt Exchange Programme, but differ sharply on GAT’s role in the subsequent challenges.
Dr Atuahene argues that the DDEP further damaged the balance sheets of local banks that were already struggling, rendering GAT’s intervention less effective and, in some cases, contributing to a “toxic” debt cycle.
GAT responded that the DDEP was a sovereign macroeconomic intervention that affected the entire banking sector and broader financial ecosystem — and was not initiated by GAT nor a function of its capital structure.
The Trust noted that during the implementation of the Ghana Financial Stability Fund — a mitigating measure introduced to cushion the financial sector against DDEP’s impact — GAT worked closely with the Ministry of Finance and stakeholders to support stabilisation efforts.
Divergent paths forward
Dr Atuahene is now demanding an independent forensic audit of both the GH¢25 billion banking sector clean-up and the GAT SPV itself. He is also calling for the conversion of high-interest debt into low-cost, long-term equity and regulatory forbearance for banks actively restructuring.
GAT, for its part, has extended an open invitation to analysts and researchers seeking primary information or technical clarification.
“Our offices are fully accessible to analysts, researchers, and commentators who seek primary information or technical clarification. Robust debate strengthens institutions. However, such debate must be anchored in factual accuracy, context, and a clear understanding of the legal and financial architecture of the intervention programme,” GAT stated.
As the war of words intensifies, the fate of the beneficiary banks — and the broader question of how best to support indigenous financial institutions — remains unresolved, with stakeholders watching closely to see whether GAT will provide the detailed financial data Dr Atuahene and the public are demanding.
The standoff also raises uncomfortable questions about transparency in Ghana’s financial sector rescue programmes and whether the cure for indigenous banking has proven worse than the disease.
