The Minority in Parliament is predicting the collapse of some five commercial banks if government goes ahead with its Domestic Debt Exchange Programme.  

It says a chunk of the liquidity of these banks is locked up in government bonds. 

“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 adds more people will be impoverished if the programme is carried out. 

“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.”

The caucus has already called on the government to immediately suspend the Debt Exchange Programme and engage various stakeholders in the exercise.

This comes after the government announced plans to extend the deadline for bondholders to sign onto the Domestic Debt Exchange Program to January 31, 2023, as part of efforts to address the country’s economic challenges.

Minority Leader, Haruna Iddrisu said the Akufo-Addo government’s reckless borrowing contributed to the seeming failure of the debt exchange programme.

“How did we get to this pit? Simple. Reckless borrowing! Sadly, the NPP Government led by Nana Akufo-Addo-Bawumia has not learned any lesson. The NPP was not only reckless in borrowing, but it has been reckless in announcing and implementing the Debt Exchange Programme. It is clear that the NPP Government did not properly think through this whole idea of a debt exchange programme. This has led to manifest confusion in the implementation of the ongoing debt exchange programme.”

The Minority group called on government to “immediately suspend the Domestic Debt Exchange Programme and engage in more comprehensive consultation on the matter with all stakeholders and the Ghanaian people.”

“It is called on all stakeholders for a national dialogue on the state of the economy and debt exchange programme with the view to achieving the most workable and least punitive steps that protect Ghanaians and households from the disastrous effects of the Domestic Exchange Program as currently received.”