Finance Minister Mohammed Amin Adam, says the government has made progress under the operationalisation of the Ghana Financial Stability Fund (GFSF) as part of the structural measures of the Debt Exchange Programme (DDEP).

According to him, the initiative has served as an important safety net to mitigate the potential impact of government debt operations on the financial sector, especially in protecting state-owned banks and eligible indigenous financial institutions.

Speaking to the media on the state of the economy on Tuesday, March 26, Mr Adam mentioned that since November 2023, the "Ghana Financial Stability Fund has supported partly state-owned banks" in recapitalising in line with their approved roadmap by regulators.

He emphasised that progress has also been made in securing additional support under a $250 million World Bank loan to provide broader support and buffer in the available additional tier-one capital instrument by the end of April 2024.

“The government is also committed to addressing the remaining legacy problems in the financial sector. We will announce measures to gradually complete the fiscal support provided to some clients of failed asset management. We will programme this relief within this fiscal framework,” he added.

The Finance Minister noted that while the DDEP has had a significant impact on the banking sector, the Bank of Ghana also believes the banking sector has profitability improved.

Regarding external debt restructuring involving bilateral and commercial debts, Mr Adam stated that the government has made significant progress.

He explained that on February 13, 2022, Ghana formally requested debt treatment under the G20 Common Framework for debt treatment beyond the debt service suspension initiative for a portfolio size of $5.1 billion.

This, he added that Ghana's bilateral creditors subsequently established the Official Creditor Committee (OCC) on May 12, 2023, under the auspices of the Paris Club to restructure the bilateral debt.

“The terms of the agreed debt treatment are expected to be formalised in a Memorandum of Understanding (MoU) between Ghana and the official creditors which would then be implemented through bilateral agreements with each member of the Official Creditor Committee.”

Mr Adam added that the OCC agreement constitutes an additional step towards restoring Ghana's long-term debt sustainability in line with the International Monetary Fund programme target.