Business News of Friday, 13 October 2017

Source: citibusinessnews.com

Banks demand expedited issuance of energy bond

Commercial banks are pleading with government to speed up processes to settle the energy sector debt.

The banks had earlier bewailed that the debt is affecting their base rates.
Government’s economic team is currently in a discussion with the International Monetary Fund (IMF) to come out with an appropriate mode to issue the 2.5 billion dollar energy bond to clear the energy sector debt.

The debt which has accrued over the years is posing serious challenges to banks in the country.

President Akufo-Addo has assured that government will clear all debts in the energy sector to bring back efficiency into the generation and distribution of electricity in the country.

The Finance Ministry has already embarked on some road shows both locally and internationally to issue the 15-year bond to settle the debt.

Speaking to Citi Business News, the Executive Director at Unibank, Clifford Mettle said government must be swift with the settling of the debt.

“It is one of the things that we were expecting from government because it is actually a promise that it will work at it. The liquidity situations in most banks are a bit critical. This will certainly help to ease the liquidity so banks are actually looking forward to the settlement,” he stated.

He adds that, “I think government has a way of structuring some of these bonds and sometimes it can take a bit of time because as a government too they have to be mindful of the fact that it is not something they have to rush through to have a negative repercussion on the country so they consider all these things before they come out with what they have realized as a bond for the various banks”.

Although Mr. Mettle admits that banks are in need of the money, he believes that the interest of the country must come first in handling the issue.

“Yes it is critical for the banks to get these things but we also have to take the interest of the nation at heart,” he explained.