Alhassan Andani: Current DDE deal not enough to protect Ghanaian banks
The former President of the Ghana Association of Banks (GAB), Alhassan Andani, has raised concerns over the current form of the Domestic Debt Exchange (DDE) program, describing it as insufficient to “cushion” commercial banks in Ghana.
In an interview on PM Express Business Edition, Mr. Andani stated that the current deal will not address the challenges facing the banking sector as the government defaults on its debt obligations.
Mr. Andani expressed disappointment that banks will have to suffer for the government’s inaction, and revealed that many banks will have their profits for 2022 wiped off as a result of the DDE.
When asked if he would sign on to the deal as a shareholder of any bank in Ghana, Mr. Andani said no, stating that the current deal might make a lot of banks worse off.
He also called for more clarity on the proposed Ghana Stabilization Fund and how it will support banks affected by the DDE. Mr. Andani suggested that the January 31, 2023 deadline should be extended to ensure that all stakeholders secure a better deal that will not lead to the collapse of their businesses.
He also expressed worries about the long-term effect of the DDE on the financial sector and bond issues. He reassured depositors that their funds are safe and that there is no need for panic.
The agreement between government and GAB, which was reached on January 23, 2023, includes final improvements to the terms of the program, including an agreement to pay a 5% coupon for 2023, a single coupon rate for each of the 12 new bonds resulting in an effective coupon rate of 9%, and clarity on the operational framework and terms of access to the Ghana Financial Stability Fund.
