An economist, Prof Godfred Bokpin has stressed the urgency for the government to take strategic steps to restore confidence in the country’s financial system.

In an interview on JoyNews’ PM Express, the Professor highlighted the importance of a credible plan, particularly in the context of government bond payments, to instill faith in investors and encourage reinvestment.

“There is so much pain in the system, and with the IMF programme, the government needs to sit down and calm the market. Part of that will be having a credible plan of paying government bonds predictably. You just can't restore confidence by mere words,” he said on Monday.

Acknowledging the challenges facing Ghana's financial landscape, Professor Bokpin emphasised that restoring confidence required tangible actions, especially concerning the payment of government bonds.

He emphasised the need for a clear and predictable plan that would assure investors of the government's commitment to meeting its financial obligations.

To address the current situation, Professor Bokpin urged the government to look beyond the banking sector and focus on the broader financial market, including the capital market and investment opportunities.

He indicated that addressing all areas of concern to create an environment that would attract both local and international investors.

“The focus should not only be the banking sector; we need to look at the capital market, investment, and others. So let's iron all these out. When people see that the government is honoring bonds, etc., people will plow back the money. Because right now, people are withdrawing their money and looking at other ways to keep the money other than plowing it into the system.”

The call for a comprehensive approach to restoring confidence come after the International Monetary Fund (IMF) approved Ghana’s request for a $3 billion bailout.

On Wednesday, May 17, the first tranche – $600 million – of the $3 billion was credited to Ghana’s bank account.

The funds will be used for the balance of payment and budget support, as well as to stabilize the foreign exchange rate and control inflation.

Another tranche of funds is expected to be disbursed by June 2023 when IMF Mission will visit Ghana to review the country’s program considerations. Another review is scheduled for December 2023 before the final disbursement.