Steps Are Being Taken To Mitigate Impact Of DDEP On Financial Sector- Akufo-Addo

The President of Ghana, Nana Addo Dankwa Akufo-Addo has assured that the Ghana Financial Stability Fund (GFSF) will reduce the effect of the Domestic Debt Exchange Programme (DDEP) on the financial sector.

This comes after concerns were raised about the impact of the Programme on the financial sector following a report that GCB Bank Plc- the country’s largest lender by assets- posted a 593.4 million cedis ($50.5 million) net loss due to the Programme.

The President, at the May Day Celebration in the Upper East region, said the government was abreast with the impact of the Programme on the sector and is putting in place measures to mitigate it.

One of them is the yet-to-be-established Ghana Financial Stability Fund (GFSF) with a target of GHC 15 billion to be provided by the Government of Ghana and its development partners.

The Fund will provide liquidity to financial institutions that participate fully in the Debt Exchange and will be managed by the Bank of Ghana under unique operational guidelines being developed by the Financial Stability Council.

Speaking at the event on May 1, 2023, President Akufo-Addo said, “As has been announced by the Finance Minister, we are establishing the Ghana Financial Stability Fund (GFSF) to provide, amongst others, solvency and liquidity support to eligible financial sector institutions, which may be affected by the Domestic Debt Exchange Programme.

“In addition, the Bank of Ghana and the regulators in the financial sector space have provided some regulatory reliefs to support affected institutions. In keeping with our common objective, the Government, through the Financial Stability Council, will monitor continuously the impact of the Domestic Debt Exchange Programme on financial institutions to enable it to take remedial action, if and when necessary.”

These, he said, would safeguard incomes, deposits, pensions, investor funds and assets.