Ofori-Atta Dismisses Debt Restructuring Concerns, Assures Banks Of Transparent Engagement

The Minister of Finance, Ken Ofori-Atta, has assured financial institutions and local investors that allegations that the government and the International Monetary Fund (IMF) are working at restructuring the country’s domestic debts are not true.

Mr Ofori-Atta said at a press conference in Accra Wednesday that no decision has been taken on the national debt although negotiations were continuing in earnest.

The minister was responding to allegations of ongoing discussions between the government and local financial institutions on how to restructure their holdings.

Mr Ofori-Atta stated that the government was committed to protecting the financial sector and would, therefore, not take unilateral decisions that risked undermining the smooth operation of the industry.

He thus assured the financial sector and the general public that transparent engagements would be undertaken on issues of mutual interest.

The minister used the press conference to comment on topical issues, including ongoing discussions of a potential restructuring of the domestic debt.

News of debt restructuring surfaced last week when some media houses reported that the government was set to start discussions with local bondholders on how to restructure their holdings.

He said at the event that such reports were false, preemptive and disruptive to the financial sector and ongoing negotiations with the IMF for a fund-assisted programme.

Sustainable debt

Mr Ofori-Atta said having a sustainable debt path was a pre-requisite for the IMF programme and efforts to authenticate that were underway.

In that regard, he said a DSA by the IMF/World Bank and the Ghana team aimed at ascertaining the level and impact of the debt on the economy was ongoing, thereby making talk of a debt restructuring far-fetched.

“Ladies and gentlemen, we simply have not reached any agreement with the fund on the parameters of any debt operations as we are in the process of completing the debt sustainability analysis (DSA).

“The government shall continue to actively engage all stakeholders in a clear and transparent manner as we seek to fast-track the IMF negotiation process,” the minister said.

He said the country needed a viable domestic financial system to support its development programme, especially at a time when access to the international capital market was limited.

“Therefore, everything must, and will be done, to protect our financial sector; and there must be room for a win-win conversation through extensive stakeholder engagement with both our domestic and external investors.

“Ghana has always had a collaborative approach with its partners and we shall, I am confident, come out with an ‘historic arrangement,’” the minister said.

“This is a government that protected the savings of4.6 million Ghanaian depositors with the reform of the banking and financial sector even in our early days.

“We owe it to the economy and Ghanaians to keep protecting it,” he added.

Five-member committee

Mr Ofori-Atta said the sanctity and the well-functioning of the financial system was sacrosanct and the government needed the support and trust of all Ghanaians to deliver this.

“Let us join hands to get this done.

“The great Celtic Miracle in Ireland in the 1980s was the result of such collaborations, especially with labour, and we shall also be blessed with the Ghana miracle.

He said a five-member committee, consisting of prominent financial services professionals, would be put together to lead “extensive stakeholder engagements across all the key segments of the financial sector.”

He said the committee would interface with the banking, asset management, pensions, and insurance sectors to help ensure smooth transmission of information.

“The announcement of the committee members will be made in the coming days and they will immediately get to work to engage key stakeholders in the financial services sector, addition to ongoing engagements with civil society organisations (CSOs), social partners (labour unions, employers, and faith-based organisations (FBOs), academia, industry professionals, and the leadership of Parliament.

“We welcome all contributions to this great public debate, but we must be careful to build and not to tear down our nation,” he said.