Debt exchange: Savings, investments will be low for years - Financial Expert

Finance and Investment Analyst, Ebenezer Asumang, has said financial institutions will record low inflows of investments from Ghanaians, especially investors for years due to the debt exchange programme rolled out by government.

According to him, financial institutions would have to repackage their products and re-sell to customers to avoid losing them.

This, Mr Asumang said, will help create artificial confidence in the financial sector for clients to invest in those products.

Speaking in an interview with GhanaWeb Business, the banking expert said, “Clearly there are repercussions going forward. Financial Institutions should expect low inflows on investment in the medium to long term. Overall savings and investments will be at the lowest level in years.”

“When the economy struggles, overall savings & investment culture is negatively impacted,” he stated.

He further stated that people will look for alternative investments such as starting a business or investing in already existing ones to rake in some profit.

Government of Ghana is seeking to revive the economy through a $3 billion loan from the International Monetary Fund.

As part of its efforts to meet the conditions required for the loan, government has announced a domestic debt exchange programme aimed at varying the terms of existing government bonds.

The announcement of the debt exchange programme has been fraught with several challenges as many have opposed this decision.

Goverment has however extended the deadline for the expiration of the debt exchange programme to January 31, 2023, and entreated all bondholders to sign onto the programme.

ESA/FNOQ