Don’t Sign Onto Debt Exchange Programme – Ghana Association of Banks
The Ghana Association of Banks (GAB) has instructed commercial banks not to sign onto the amended debt exchange programme until its members’ demands are met.
GAB contends that it has made several proposals to the policymakers to help reduce the impact of the programme on their operations.
This is due to the uncertainty regarding the impact of debt restructuring on the banking industry.
It, therefore, wants an extension to the deadline for the amended debt exchange offer.
According to the association, it wants all concerns regarding the programme to be addressed before commercial banks accept it.
In a letter sent to the Managing Directors and Chief Executive Officers of the banks, it said “from the uncertainty surrounding the programme, GAB recommends that all banks must not stay any further 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”.
The leadership of the banking industry had met the Vice President, Dr Mahamudu Bawumia; financial sector regulators including the Bank of Ghana and other stakeholders over the debt exchange programme.
So far, there had been several protests from all quarters including individual bondholders over the debt exchange programme.
They claim the government failed to consult them before rolling out the programme.
It is currently unclear how many institutions or individuals have signed onto the programme which has been rejected by several groups.
The government launched the programme to invite holders of bonds to voluntarily exchange approximately GH¢137 billion domestic notes and bonds of the Republic including ESLA and Daakye for a package of new bonds.
The domestic debt exchange program since its announcement has faced huge opposition from labour groups which managed to get pension funds exempted. Other groups including the Individual Bondholders Association have also rejected the programme.
The debt exchange programme is a condition for the government to secure an IMF-support programme to revive the ailing economy.