A banking consultant, Dr. Richmond Atuahene, has raised alarm regarding the government’s extensive borrowing practices.
He said these actions are not only eroding the financial stability of many banks but also pushing them towards bankruptcy.
According to Dr. Atuahene, the government’s domestic debt exchange program, backed by the government, has created a dangerous avenue for irresponsible borrowing.
This, in turn, is exerting significant pressure on local banks and the stability of the national currency, the Cedi.
He cautioned that unless the government reins in its borrowing habits, a multitude of banks could soon find themselves in dire financial straits.
“Ever since we went through the domestic debt exchange programme, the government has borrowed as if it’s nobody’s business.
“They use the short-term to finance the long-term as if nothing is going to happen and the way we are going, if we continue the trajectory that we are taking, the banks are going to be in trouble because the government is out of the financial market and it is not paying its outstanding debts,” Dr. Atuahene told Citi FMon Wednesday, May 22.
“When I hear them say the economy is growing, from the figures available, I don’t see the growth anywhere because it is the private sector that grows the economy and not the government sector but unfortunately, the private sector is deprived of capital and cannot expand business,” the financial analyst added.
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