In an effort to restore financial stability in the wake of the Domestic Debt Exchange Programme (DDEP), the Government of Ghana is in advanced discussions to secure a 250 million dollar funding facility from the World Bank.
The financial assistance is intended to support the recapitalization of banks and other financial institutions adversely impacted by the programme.
Andrew Amerkson, the Head of Banking and Non-Banking at the Ministry of Finance, revealed that the government is focusing on helping recapitalize at least eleven financial institutions in 2025.
His remarks were made during the launch of the Ghana Association of Savings and Loans Companies’ five-year strategic plan in Accra.
Speaking on behalf of the Finance Minister, Dr. Cassiel Ato Forson, Amerkson underscored the government’s commitment to ensuring that the institutions are adequately capitalized to enhance their operations and overall stability.
In his speech, Dr. Forson explained the background of the financial interventions aimed at stabilizing the banking sector.
“The government has long been proactive in ensuring the stability of the financial sector. We designed the Ghana Financial Stability Fund and allocated 5.7 billion cedis to recapitalize bonds, which has been critical in stabilizing the financial system,” Dr. Forson remarked.
He further emphasized the success of the Ghana Financial Stability Fund A2, which was introduced in the previous year. “At the end of last year, Fund A2 supported 11 financial institutions, including four banks, four capital market operators, and three insurance companies. This demonstrates the government’s unwavering commitment to ensuring the long-term stability of our financial sector,” Dr. Forson added.
The government’s current initiative to engage the World Bank for a 250 million dollar loan facility is seen as a key part of the broader strategy to stabilize the financial system. “We have engaged with the World Bank for a loan facility of 250 million dollars, which will specifically support the recapitalization of banks and savings and loans institutions (SDIs). This initiative is part of the World Bank-funded Ghana Financial Stability Project and aims to promote financial stability across the country,” Dr. Forson confirmed.
Looking ahead, the government is optimistic about the positive impact this financial support will have on the broader economy. “By securing this facility, we are not just addressing immediate liquidity concerns, but also ensuring that our banks and other financial institutions remain resilient and continue to contribute effectively to the economy,” he concluded.
This move comes at a critical time, as the government seeks to mitigate the financial fallout from the DDEP, which has had significant effects on local banks.
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