Audio By Carbonatix
Lawyer and Business Strategist, David Ofosu Dortey is warning that confidence in the finance and banking sectors could be hit badly in the coming months.
That is if the Domestic Debt Exchange Programme is not handled well by the Government.
According to him, the programme would lead to more people keeping their monies at home rather than with the banks.
“Under the PNDC regime, if you had more than 50 cedis or something like that you are the problem, people lost confidence in the financial sector - they were keeping monies at home. Then finally after 20 years, people get confidence then I make reference to February 2014 where we had a circular from the Bank of Ghana where you basically could not hold dollar anymore and a lot of people lost money, I lost money and we lost confidence. Then just as we are about to regain it, the financial sector – the capital bank, UT Bank etc vanished then we lose confidence again and just when we think the confidence is being restored, we have debt exchange,” he said.
Speaking in an interview on JoyNews’ Business Edition of PM Express on Thursday, he noted that when the confidence in the sector is killed, it will take a very long time to recover.
“I have seen people who have bought safes and trying to keep monies away from banks. So if you have a situation where .. people refuse to send monies to the banks and stop saving or save in another non-cash instrument like buying property or sending their monies abroad by buying dollars, we would have killed confidence in the banking sector and it will take a long time to recover,” he explained.
Mr. Dortey’s fears have been influenced by the government's introduction of a debt exchange programme.
The programme which was launched on December 5, 2022, is intended to restructure the country’s debt which has reached unsustainable levels.
The current structure of the programme involves the inclusion of individual bondholders.
But the individual bondholders have rejected the offer and have called on government to exempt them from the programme.
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