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Don’t pay victims of financial scams; it sends bad signals- Prof Quartey tells gov’t

Prof Quartey argued that the government’s decision to pay customers of DKM for their losses incurred after the company collapsed will only encourage other victims in similar situations to demand a bailout from the government.

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Prof Peter Quartey play

Prof Peter Quartey

Professor of Economics at the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, has called on the government to desist from bailing out customers of financial scams in the country.

In an interview with Accra-based Citi FM, Prof Quartey argued that the government’s decision to pay customers of DKM for their losses incurred after the company collapsed will only encourage other victims in similar situations to demand a bailout from the government. This he said will threaten governments fiscal position.

His comments come after the Finance Minister Ken Ofori-Atta disclosed that the government had settled about 80 per cent of funds owed DKM customers. He said this during his presentation of the 2019 budget in Parliament.

READ ALSO: 1D1F: Nana Addo commissions diaper making factory in Bortianor

But Prof Quartey entreated the government to ensure that the reimbursement of DKM customers is the last time it pays victims of such financial scams.

“The DKM payment is a campaign promise, and from what we heard from the budget Government has already paid the majority. But going forward I don’t think we should encourage that kind of payment. Yes, there is an element of greed. If you recall in the case of Menzgold, the Bank of Ghana came warning customers and the customers rather went on rampage demonstrating and attacking Bank of Ghana. Now that they’ve hit a wall they want the Central Bank to come and bail them.”

READ ALSO: Menzgold suspends online trading; ask staff to go on leave

He also commented on how the bailout of the collapsed banks has worsened the situation.

“Even the banks, GHC 7.9 billion Ghana Cedis to save them is a lot of money. How much are we allocating to Planting for Food and Jobs, GHC 380 million? How much are we allocating to 1D1F, GHC 95 million? And we are spending GHC 7.9 billion Ghana Cedis to bail out banks. Are we going to do the same for Menzgold ?. So the continuous bailouts will certainly have a strain on our fiscal position, therefore we should not encourage those kinds of payments.”

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