Ghana’s Top Banks Post Heavy Losses Due To Domestic Debt Exchange Programme

• The government's debt restructuring drive has caused top banks in Ghana to record significant losses in 2022
• Ghanaian banks have been posting their 2022 performance and it shows top banks like Standard Chartered Bank and GCB Bank bled money
• GCB Bank's audited accounts show the bank recorded a GH¢593.4 million net loss for the year ending December 2022, a first since 1993

Top banks in Ghana have posted heavy losses due largely to the government's domestic and foreign debt restructuring drive.

The Domestic Debt Restructuring Programme (DDEP) and the foreign debt restructuring are being led by finance minister Ken Ofori-Atta. They seek to alter an agreed plan between the government of Ghana and lenders on how to repay loans.

The Government of Ghana and the Ofori-Atta-led finance ministry have said the country is cash-strapped and won’t be able to honour its domestic and foreign debt obligations.

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GCB and StanChart record big losses in 2022

There have been deep concerns by local bondholders and industry watchers about how the government is going about the restructuring, however, the 2022 Audited Financial Statements released by some banks show the debt programme has already taken a toll.

Ahead of an April 30, 2023, deadline, Ghanaian banks have been posting their 2022 performance and it shows top banks like Standard Chartered Bank and GCB Bank bled money.

For instance, Bloomberg reports that Ghana’s largest lender by assets GCB recorded a GH¢593.4 million net loss for the year ending December 2022. GCB’s loss is its first since 1993, reports Bloomberg.

StanChart, another big bank in Ghana, also posted a loss of GH¢297.8 million.

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The debt restructuring is critical to the government's move to get $3 billion from the International Monetary Fund (IMF).

GT Bank's parent company, others take steps to minimise risks

Meanwhile, other reports indicate that parent companies of some banks operating in Ghana have taken steps to minimise risks over the government's controversial debt restructuring move.

Joy Business reports that Guaranty Trust Bank, First National Bank, Stanbic and Zenith have already hinted at significant losses by their Ghana subsidiaries due to the impact of the DDEP on their operations.

GT Bank Ghana's parent company, Guaranty Trust Holding Co., Nigeria has resolved to slow lending and bond trading in Ghana.

Ghana’s debt crisis could mirror Greek scenario

Meanwhile, YEN.com.gh has reported in a separate story that a finance expert said Ghana's debt situation makes the country's economic prospects uncertain.

Haruna Alhassan, an analyst with the Centre for Social Justice (CSJ) explained that Ghana's debt crisis could mirror the Greek scenario of 2010 which took close to a decade to fix.

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Alhassan told YEN.com.gh that Ghana's road to economic recovery would be long and difficult starting in 2023.

Source: YEN.com.gh