Another Financial Sector Collapse Imminent – Ato Forson Warns

Dr Cassiel Ato Forson, the Ranking Member of Parliament’s Finance Committee, has said that Ghana will face another financial sector collapse if the government goes through with its Domestic Debt Exchange Programme (DDEP).

According to him, the government, through its DDEP, is seeking to transfer its debt problem to individuals and private organizations including banks, which will lead to them not being able to pay their depositors and their eventual collapse.

Speaking in an interview on JoyNews on Monday, January 16, 2023, which was monitored, Ato Forson added that at least five banks are on the brink of collapse because of the economic challenges in the country.

“… at the end of the debt restructuring, the financial sector will have to collapse again. I am already seeing about five banks (that are) already going to shake because of what is going to happen to them if we allow it (the DDEP) to go (through).

“So, do we really want to transfer the burden where the state is insolvent to the private sector and what will be the repercussions going forward?” we quizzed.

Dr Ato Forson, the Member of Parliament for Ajumako Enyan Esiam, therefore urged the government to hold on to its DDEP and make the necessary consultations before going on with it.

“That is why we are saying that it is for you and I to sit down and jaw-jaw for us to find a proper mix to resolve (the current challenges),” he said.

He added that should the government decide to force the debt restructuring programme on Ghanaians, the entire middle class in the country will also be whipped out.

Meanwhile, the invitation to the Domestic Debt Exchange Programme has been extended for the third time to January 31, 2023.

This comes after the second extension by the Finance Ministry expired on January 16, 2023.

The decision to include individual bondholders was necessitated after the government was forced by labour unions to abandon plans to include pensions in the debt exchange programme which was first announced in December 2022.