All commercial banks in Ghana have been ordered by the Ghana Association of Banks (GAB) not to participate in the government’s revised debt swap program.
Before a choice is made to join the program, the Association contends that requests from its members must first be satisfied.
GAB noted that the prolonged uncertainty caused by the debt restructuring operation will probably have an effect on the banking sector in a letter it sent to managing directors and chief executive officers of commercial banks.
“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.