Domestic debt gloom

Ghana: Debt restructuring, macro challenges stoking fears over banks’ solvency

By Jonas Nyabor, Sherif Tarek

Reserved for subscribers

Posted on May 3, 2023 13:00

© People walk past the Bank of Ghana in Accra, Ghana, November 28, 2018. REUTERS — People walk past the Bank of Ghana in Accra, Ghana, November 28, 2018. REUTERS

With Ghana’s much-discussed Domestic Debt Exchange (DDE) programme squeezing its financial ecosystem, the banking sector’s solvency could be facing risks, analysts say. Raising the alarm last week were two of the country’s top banks – GCB and StanChart – among others reporting 2022 losses, which might be aggravated by the debt restructuring that kicked off last December, as well as mounting macroeconomic challenges.

“It certainly is true that the entire banking sector is highly exposed to sovereign debt. There is significant pressure on the banking system’s capitalisation, its solvency as a whole as a result of the domestic exchange,” Tim Slater, director at Fitch Ratings, tells The Africa Report.

There's more to this story

Get unlimited access to our exclusive journalism and features today. Our award-winning team of correspondents and editors report from over 54 African countries, from Cape Town to Cairo, from Abidjan to Abuja to Addis Ababa. Africa. Unlocked.

Subscribe Now

cancel anytime

Already a a subscriber Sign In

More Business

The traveller’s experience is very different, depending on which side of security checks you happen to be on. © GettyImages

ready for take off

Congo-Brazzaville, Kenya, Senegal…Africa’s airports must modernise Online check-in, priority queues, lounges, connectivity issues…to reduce passenger waiting times and grow, the continent’s airports are slowly moderni...

jad20230526-eco-cameroun-telecoms-camtel-photo2-1256×628-1685118985 © A Camtel shop in Yaoundé in 2023… Maboup

failed networks

Camtel, Orange, MTN, Nexttel… Cameroon’s telecoms watchdog doles out fines For the first time since 2019, the regulatory agency has imposed a fine – totalling $9.7m – on Cameroon’s three main telecoms providers.

© Worker cleaning Kenya’s court of arms at Treasury Building during the budget reading 2020/2021./SOPAIMAGES

More or less borrowing?

Five questions on Kenya’s new debt policy As Kenya prepares to table the final budget for the upcoming fiscal year beginning next July, there are adjacent hasty plans to get parliament to chan...

© A general view of solar power panels is seen at the Atlantic Shrimp farm in Badagry, Lagos, Nigeria July 5, 2022. REUTERS/Temilade Adelaja

New Dawn?

Nigeria: Tinubu policy shift can prompt solar-power breakthrough Nigeria’s new President Bola Ahmed Tinubu has the chance to drive forward the country’s adoption of solar power, WATT Renewable CEO Oluwole Eweje tell...