Ghana To Face More Troubles In The Coming Weeks; Details Drop. A former Chief Executive Officer at the Ghana National Petroleum Corporation and the National Petroleum Authority, Alex Mould, has dropped a serious prediction about the Ghanaian economy. According to him, the economic woes Ghana is facing might worsen in the coming weeks. And this is a result of some happenings in some state agencies and other institutions whose decisions have some indirect but serious impact on the Ghanaian economy.
Alex Mould revealed the basis for which he made that prediction. According to him, over these past few weeks, international banks have reduced the credit or loan facilities they give to Ghana. Also, he made known to Ghanaians, some unfortunate crises happening in the Bulk Oil Distribution Companies (BDCs).
“Corresponding Banks have slashed their credit lines to Ghana. Oil traders have huge receivables from Bulk Oil Distribution Companies (BDCs); their credit teams are jittery on their exposures – and so are their banks. BDCs can’t get hold of forex to settle existing liabilities. For some BDCs US$ is unavailable. For many BDCs they need to top-up the Cedis collected from OMC for products sold as the rate has moved and more Cedis are needed to buy the US$.
Ghana To Face More Troubles In The Coming Weeks; Details Drop
“Last week a number of cargoes were diverted; Cargoes currently at anchorage and those due in the next few weeks stand a high probability of being diverted to other countries as BDCs face a forex crunch. BoG provides $120m each month while the BDC industry needs $350-450 a month. Stock levels will be 3-4 weeks at most at the end of the week”, he explained.
Despite his affiliation with the National Democratic Congress, Alex Mould relying on his experience and expertise gave these suggestions to the ruling New Patriotic Party.
- BoG needs to immediately allocate more forex to BDCs to pay for backlog payables so that banks can free credit space for new Letters of Credit or other payment mechanisms to be re-activated
- NPA, the Regulator needs to step in with alacrity !!!
- NPA needs to bring some discipline in BDC markets as some BDCs are using the same collateral for multiple suppliers
- MCs are increasing their exposure to multiple BDCs especially those whose exposures to their primary BDCs are in default. his poses a systemic risk in the industry
- NPA needs to reinstate the cross-default mechanism so that each OMC exposure to each BDCs is known and thus their total exposure is known.
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