Commercial banks directed not to sign onto amended debt exchange programme

The Ghana Association of the Banks (GAB) has directed all commercial banks in the country not to sign onto government’s amended debt exchange programme.

According to the Association, demands of its members must first be met before a decision is taken on signing onto the programme.

GAB in a letter issued to Managing Directors and Chief Executive Officers of commercial banks pointed out that the ongoing uncertainty due to the debt restructuring exercise will likely have an impact on banking sector.

“From the uncertainty surrounding the programme, GAB recommends that all banks must stay away from 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”.

The Association further wants government to engage key stakeholders in the financial sector and announce an extension to the earlier expiration deadline for the debt exchange programme.

As part of efforts to secure an IMF bailout and address the country’s unsustainable debt situation, government launched the Domestic Debt Exchange Programme 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