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

According to him, the prediction can be attributed to the unavailability of liquidity support for these banks which have been locked up in government bonds.

Speaking with journalists in Parliament on January 16, 2023, Dr Ato Forson cautioned that the current economic situation in the country will be dire on the financial sector.

“The banks will collapse. In fact, I project a minimum of five banks collapsing if this [debt exchange] goes ahead. Not only that, a number of banks will have to lay off staff and close some of their branches”, says Minority Spokesperson on Finance, Dr. Cassiel Ato Forson.

He further expressed concern that bondholders and the general population will be impoverished if the debt exchange programme moves ahead.

“The monies that banks have invested is not their money. It is depositors’ money, so there will be liquidity issues. When you go to the banks and ask for your money, there is a possibility that, you won’t get your money,” Dr Ato Forson stressed.

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

This would be the third extension since the programme was launched on December 5, 2022.

As part of efforts to secure an IMF bailout and address the country’s unsustainable debt situation, government launched the DDEP inviting bondholders to voluntarily exchange approximately GH¢137 billion domestic notes and bonds of the Republic including ESLA and Daakye for a package of new bonds.

In the wake of this, various groups of bondholders in the financial sector have called on their members to reject government’s Domestic Debt Exchange Programme due to a lack of broader consultations and negotiations.

MA/FNOQ