Have faith, we’re trying to get debt exchange done to move IMF discussion to board level – Addison

The Governor of the Bank of Ghana (BoG) Dr Ernest Addiosn has appealed to Ghanaians and all stakeholders to keep faith with managers of the economy.

He said authorities are working hard to get the Domestic Debt Exchange (DDE) programme completed as part of efforts to move the ongoing discussion with the International Monetary Fund (IMF) from the staff level to the board for approval.

Once that is done, he said, Ghanaians can expect an IMF deal by end of the first quarter of this year.

Answering questions during the 110th Monetary Policy Committee Press conference in Accra on Monday, January 30, he said “we should have faith, we are trying very hard to get this debt exchange completed, trying very hard to get the external restructuring also through, all of that will help us to move the discussion from the staff level to the board. As I explained earlier, this is the plan B.

“Hopefully, once that is successful we should get the disbursements by end of the first quarter, or soon after that, which will augment our foreign exchange reserves and bolster confidence into the Ghanaian economy.

The Ministry of Finance is currently engaging stakeholders especially individual bondholders on the domestic debt exchange programme.

Already, the Government of Ghana and the Ghana Insurers Association reached an agreement on the participation of insurance companies in the programme.

Under the agreement, insurance companies will participate in the exchange on similar terms as the banks, a joint statement issued by the Ministry of Finance and the Insurers Association said on Thursday, January 26.

“The government through the solvency window of the Ghana Financial Stability Fund (GFSF) will provide support for the insurance companies that are seriously affected by the DDEP.’

“The objective is to protect jobs and the stability of the Industry,” the statement said.

Last week, the Government and the Ghana Association of Bankers (GAB) also reached an agreement on the new terms for the Domestic Debt Exchange programme.

Earlier, the banks rejected the programme as announced by the government.

The GAB directed commercial banks not to sign onto the amended debt exchange offer over uncertainty surrounding the impact of the debt restructuring on the banking industry.

The association wants its concerns addressed before accepting the debt exchange offer, according to a letter sent to managing directors of banks and seen by 3Business. GAB told member banks that may want to consider the debt exchange in its current form to formally inform the association first before doing so.

“…From the uncertainty surrounding the programme, GAB recommends that all banks must stay any further movement on the exchange until our demands have been met. However, in the event that a bank may have to move forward to exchange, the MD/CEO must inform the CEO of GAB directly of the decision,” according to the letter sent to the banks.”

However, after an engagement with the Ministry of Finance, the Association of Banks that per the new terms, the participation of member banks is subjected to individual bank’s internal governance and approval processes.

“This is a significant milestone towards addressing our economic challenges, and will thus help to restore macro-economic stability and accelerate Ghana’s economic growth.

Source: By Laud Nartey

Leave a Reply

Your email address will not be published. Required fields are marked *