Economist at Louisiana Economic Development in the USA, Dr. Sa-ad Iddrisu, has revealed a looming banking crisis in Ghana if the government is unable to get the $1.5 billion dollar Stability Fund by July 2023.
According to him, if government is not able to get the funds by July this year, some banks will start collapsing since they won’t be able to pay their workers and keep their operations running.
He argues, already, some banks have recorded huge losses, therefore the lack of liquidity support from the Stability Fund will leave them with the option to fold up or reduce their number of branches, which will result in job losses.
Speaking in an interview on the AM Show on Joy News, Dr. Sa-ad Iddrissu said the government must speed-up processes in mobilising funds to cushion the banks from this timing canker.
“We are heading into a banking crisis, believe it or not, we are currently suffering. If government is not able to get the $1.5 billion Stability Fund by July 2023, some banks will start collapsing”.
“Even what is happening in Ghana is affecting the Nigerian economy because a lot of the Nigerian banks in Ghana, are also recording loses”, he added.
Reacting to this development, Banking Consultant, Dr. Richmond Atuahene urged government to engage mining and telecom firms to help mobilise revenue to salvage the imminent danger.
“We need to structure it in such a way that we engage the mining and telcos because they are a cash cow especially some of the telcos. We need to get the inflows to support the sector”.
The Ghana Stability Fund is managed by the Bank of Ghana under unique operational guidelines being developed by the Financial Stability Council.
Meanwhile, the World Bank has committed $250 million to the fund. The amount will be paid by the third quarter of 2023. Talks are underway for donor partners such as the African Development Bank for further resources into the fund.