Serious Trouble Looms; Five Banks Risk Collapse; Secret Finally Drops

The Minority Spokesperson on Finance, Dr. Cassiel Ato Forson, has predicted the collapse of some five commercial banks in the country should the government undertake its proposed Domestic Debt Exchange Programme.

He attributes the prediction to the lack of liquidity support for these banks, which have been locked up in government bonds.

Dr. Ato Forson warned journalists in Parliament on January 16, 2023, that the country’s economic situation would be disastrous for the financial sector.

“The banks will fail. In fact, if this [debt exchange] goes through, I expect at least five banks to fail. Not only that, but a number of banks will have to lay off employees and close some of their branches,” says Minority Finance Spokesperson Dr. Cassiel Ato Forson.

He also expressed concern that if the debt exchange program is implemented, bondholders and the public will suffer.

“The funds invested by banks are not their own. There will be liquidity issues because it is depositors’ money. When you go to the bank and ask for your money, there’s a chance you won’t get it,” Dr. Ato Forson emphasized.

Meanwhile, the government has extended the deadline for the Domestic Debt Exchange Programme’s expiration to January 31, 2023.

This would be the program’s third extension since its inception on December 5, 2022.

As part of its efforts to secure an IMF bailout and address the country’s unsustainable debt situation, the government launched the DDEP, inviting bondholders to voluntarily exchange approximately GH137 billion in Republic domestic notes and bonds, including ESLA and Daakye, for a package of new bonds.

Following this, various financial sector bondholders have urged their members to reject the government’s Domestic Debt Exchange Programme due to a lack of broader consultations and negotiations.

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Written by Ghana Education News Editorial Staff

The Ghana Education News Editorial Staff is comprised of seasoned education consultants, policy analysts, and verified journalists dedicated to providing accurate, timely, and credible updates on the Ghanaian GES curriculum, WAEC updates, and academic leadership.