Banking principles were ignored – Prof Lord Mensah faults handling of UniBank collapse

Accra, July 31, 2025 – In a scathing critique of Ghana’s 2017–2020 banking sector cleanup, Professor Lord Mensah, Financial Economics professor at the University of Ghana Business School, has charged that fundamental banking principles were disregarded in the decision to collapse orphan banks like UniBank.

Speaking on PM Express on JoyNews on July 30, 2025, Prof. Mensah emphasized the importance of the principle: minimize losses and maximize recovery before undertaking bank closures. He noted that when UniBank reportedly owed GH¢4.97 billion, it had proposed a GH¢2 billion recovery offer—which, according to Mensah, should have been accepted instead of allowing a full collapse that imposed the burden on individual taxpayers 

He pointed out that banking systems involve multiple stakeholders—including governments, employees, and communities—not just shareholders. At the time, UniBank was contributing substantial corporate tax revenues (25–30 %) and supporting livelihoods across many Ghanaian families: “If you collapse the bank… you end up sacrificing employees and at the same time, the state” 

According to Prof. Mensah, the banking cleanup transferred full financial responsibility to taxpayers, who ultimately funded more than GH¢21 billion in rescue costs—much of which he argues could have been avoided by first accepting available recovery offers. He stated, “From where I sit, it has to do with the basic principles of banking, which were not applied in the entire banking clean‑up”

He also echoed concerns raised by legal expert Martin Kpebu—describing the sectorwide intervention as politically motivated: “the motive was more of witch hunting than following banking principles” 

The broader context recalls the Ghana banking crisis from 2017 to 2020, during which several indigenous banks, including UniBank, were placed into administration or consolidated by the Bank of Ghana. Underlying causes included undercapitalization, governance breakdowns, poor credit practices, and failure to follow risk management protocols 

As debates continue over accountability, bank reform, and compensation mechanisms for victims of the crisis, Mensah’s perspective draws attention to whether Ghana used the bailout opportunity to pursue recoveries—and whether standard banking ethics were sidelined in favor of rapid closure.

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