Difficult times coming, banking sector squeeze, and more layoffs - Ofosu-Dorte


 Ghanaians should not expect an economic revival this year, according to David Ofosu-Dorte, Executive Chairman of AB & David Law Firm.

Additionally, given the continuing debt restructuring, residents' trust in the banking sector's recovery should be examined.

But that's not all. According to David Ofosu-Dorte, he expects more layoffs and downsizing by cash-strapped companies.

"I mean, a lot of businesses who will not have access to money to expand including those in the banking industry who have had the payments of their bonds postponed in the debt swap would shrink. We expect a lot of layoffs and harsher circumstances," he told Bernard Avle on Monday's Point of View.


As part of continuing discussions with the International Monetary Fund (IMF) to win $3 billion in economic help for Ghana, the government swapped current bonds for new ones with more flexible interest payment plans.

After an economic slump and issues with debt service, the government adopted the domestic debt exchange scheme to allow itself more time to satisfy its budgetary responsibilities.

Since its launch, the scheme has met fierce resistance from various organisations and people.

In December, Ghana and the IMF reached a staff-level agreement, paving the way for the $3 billion bailout.


One of the prerequisites for the Bretton Woods institution's board to examine Ghana's proposal is the local debt restructuring program.

The government cautions that if the debt swap scheme is not implemented, the country's economy will suffer a terrible collapse.

Yet, David Ofosu-Dorte argues that the financial industry and the lives of Ghanaians do not appear to be in good shape at the time.

"But, the harsher times will not be caused by IMF conditions this time. It's the truth of the situation. People will store their money outside of banks, causing the financial industry to suffer even more. Many will put money beneath their beds at home, in currency, or in real estate. "There is now a trend of increased purchases in safes, and the price has even gone higher, indicating that individuals are safeguarding their own money," he said.

ABDUL-WAHAB

VOV stands for Voice Of Volta, we are the mouthpiece for the second-largest local dialect spoken in Ghana. But our programing is 70% English and we are heavy on sports and entertainment, we provide good music, credible and reliable news.

Post a Comment

Previous Post Next Post