Economist and Dean of the Business School at the University of Cape Coast (UCC), Professor John Gerchie Gatsi, says Ghana may see a repeat of the aftermath of its financial sector clean up if government does not exercise extreme caution in executing the debt exchange policy.
He mentioned the debt exchange policy has caused some level of apprehension in the country’s financial sector.
“There is some apprehension about a number of banks and insurance companies collapsing if the situation is not handled carefully. Already, the financial sector clean-up has left some 5 banks fragile and with this new policy being introduced, there is a risk of a repeat of the financial sector clean up,” he shared with Samuel Eshun on e.tv Ghana’s ‘Fact Sheet’ show.
He described the financial sector as the life blood of every country, cautioning government to be careful in tampering with the sector.
The financial expert believes government anticipates such a crisis and that is why it has set up a stability fund to support the process.
The Government on Sunday announced a slash in interest payments for domestic bondholders to zero percent in 2023 and pegged 2024 interest payments at 5 percent.
According to the government, there will be no haircut on the principal of bonds, adding that individuals with government bonds will have their full investments upon maturity.
In a public address on Sunday, December 4, on the current economic situation, the Finance Minister, Ken Ofori-Atta said the government will ensure that people’s investments are safe.
He further announced that interest payments for domestic bondholders for 2024, will be pegged at only 5% adding that from 2025, the rate increases to 10%.
By; Joel Sanco
