Ghana’s economy is in a big hole; financial sector is failing; banks are collapsing – Assibey-Yeboah

Former New Patriotic Party (NPP) Member of Parliament for New Juaben South, Dr Mark Assibey-Yeboah has indicated that Ghana’s economy is currently in a deep mess.

He said the struggling economy is leading to the failure of banks and the entire financial sector.

Speaking on the Business Focus with Paa Kwasi Asare on TV3 Monday January 16, Dr Assibey-Yeboah who was the chair of the Finance Committee of the 7th Parliament said “Now, we are in a hole, you have individual bondholders going to be affected, the financial sector is going to crush. I am telling you now, where we are as a country, this is not the time to massage issues, the banks, I don’t want to mention names, some of them will collapse.

“Let us say you are a bank and you are exposed to government bonds to the tune of GHS2billion. If you have 20 per cent, that is 400Million Cedis in interest payment you forgo , do you know what that will do to your balance sheet? So banks are going to lay people off.”

Regarding the Domestic Debt Exchange, he predicted that the deadline will be pushed forward again.

In his view, the necessary steps that the governments needs to take to ensure a successful programme have not been followed.

On Monday January 16, the government yet again extended the Domestic Debt Exchange (DDE) Programme.

This makes it the third extension following agitations among individual bondholders to sign on to the Programme.

The decision is to allow the government to further engage with these bondholders.

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The government had initially extended subscription to the Programme from Friday, December 30, 2022 to Monday, January 16, picking the following day as Announcement Date.

Per that schedule, Tuesday, January 24 was slated for settlement of invitations.

However, on Monday, January 16, government announced yet again that the new deadline will be Tuesday, January 31.

Dr Assibey-Yeboah who was the chair of the Finance Committee in the 7th Parliament said “Initially, we were told that individual bondholders will not be part of the debt exchange. People have planned their lives around the bonds that they hold and then suddenly, in the wee hours of 31st December, you sneak this one out and say that now, individual bondholders are part.

“Because we were all celebrating Christmas we didn’t pay attention.”

He added “This is my hard earned money and somebody is picking from it. You told me individual bondholders will not be part Why are you including individual bondholders? Have you engaged the individual bondholders? You haven’t. That is why I say the deadline will be extended again. The consultations we need, the hard decisions we need to take we are not taking them.”

Individual bondholders had expressed dissatisfaction with the Programme, accusing government of failure to engage them.

They had petitioned the Finance Minister, Ken Ofori-Atta, to exclude them from the Programme.

Under umbrella body Ghana Individual Bondholders Forum (IBF), the bondholders accused both the Finance Minister and President Nana Addo Dankwa Akufo-Addo of short-changing them and failing to keep their promise.

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“Sir, let it not be said ever that during your tenure, your policies impoverished citizens whose primary duty to country was service and love through hard work and taxes.

“Your DDE as proposed for Individual Bondholders takes away our liberty to self-sustain, mocks hard work, and robs us of legally acquired property. None of these reflect the tenets of good governance.”

They had offered to make their expertise available to help the government solve the economic quagmire the country finds itself in.

Meanwhile, the Minority in Parliament is calling on President Akufo-Addo to immediately suspend the Programme and start extensive engagement.

The caucus said the government should organised an economic dialogue as part of the engagement before any consideration of reintroduction.

source: 3news