The Finance Minister, Dr. Mohammed Amin Adam, has disclosed that government is going to announce another bailout for depositors whose funds got stuck as a result of the financial sector cleanup by October 2024.
The government in 2017 undertook the banking sector clean-up under the supervision of the Finance Minister, Ken Ofori-Atta. The exercise saw a reduction in the number of banks from 34 to 23, whilst 347 microfinance institutions, 15 savings and loans and eight finance houses had their licenses revoked.
People whose fund were with the affected institutions got affected by the move, losing monies in the process.
But according to the Finance Minister, individual investments should ordinarily not be the concern of government. However, because the Akufo-Addo government cares for the people, it has decided to bail victims of the cleanup out.
“Ideally, government should not be held responsible for the investment decisions of individuals, but this government is so caring.
“Mistakes were made and people were not well-informed, and they didn’t know who to consult to be advised, but we also know that the people who are affected are suffering, and we have heard that some people have died and others had to commit suicide.
“This government is so caring that in the first place, we granted some bailout to all the affected and I want to tell you again that the President has directed that we do another bailout. So between now and October, we will release ¢1.5 billion to the affected people,” he told attendees at a UK Town Hall meeting, Sunday, June 23, 2024.
He also disclosed that the government has successfully restructured its debt of US$5.1billion with its official creditors, and has concluded the restructuring of 13.1 billion dollars with Eurobond holders.
This, he said is an official completion of Ghana’s debt restructuring programme with its creditors.
According to the Minister, the effort put up by the government during the restructuring has saved the nation some US$8 billion.
“Last two weeks, we concluded negotiations with the official creditors, and we have agreed to restructure 5.1 billion dollars. I am telling you that the government is good in negotiations and of this amount, we are going to make savings of $2 billion.
“As I speak to you, tomorrow morning, there will be an announcement that we have also concluded our negotiations with the Eurobond Holders of $13.1 billion, and ladies and gentlemen, when we announce it, please read the details. We have negotiated a good deal for Ghana and that is $8 billion,” he told attendees at a UK Town Hall meeting, Sunday, June 23, 2024.
The government recently secured delayed payment on interests and postponement on the maturity date in a restructured debt deal with bilateral creditors.
To meet its IMF target, the $77 billion economy needs to reduce debt to 55% of gross domestic product by 2028, compared with a burden of 109% projected for the year before Ghana began restructuring.
The current bondholder agreement would leave debt slightly above that target.
“Ghana’s economy fared better than the IMF expected, expanding 2.9% in 2023 compared to an initial IMF target of 1.5%. That means a revised DSA would accommodate the agreement with bondholders,” Adam said.
Ghana began working to revamp its debt a little over a year ago as part of a deal with the International Monetary Fund, reaching an agreement in principle with bilateral creditors in January to rework $5.4 billion of obligations under the Group of 20 Common Framework for Debt Treatment. That agreement set the tone for the restructuring of Eurobond debt.
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