Ghanaian government to pay GH¢166m debt to banks
The payment will boost banks’ financial stand and avert collapseThe Ghanaian government will be paying some leading banks in Ghana GH¢166m debt which is connected with the energy sector debts, the first major collaboration between the government, Bank of Ghana and leading banks. This was disclosed by the President of Ghana Association of Bankers (GAB), Alhassan Andani. The payment of the GH¢166m which represents the third tranche government was advancing to banks will be paid in instalments quarterly for a period of five years. The banks involved are Ecobank Ghana Limited, Stanbic Bank Ghana Limited and Standard Chartered Bank Limited respectively. The disbursement of the payment would strengthen the banks' financial stand and save them from collapsing. According to the Finance Minister, Seth Terkper, the payment would be funded from series of energy sector levies. He further stated that payment terms come with reduction in interest rate on the debt to 22 percent from 30 percent. Ghana's banking sector largely depends on government securities and public sector loans, which exposes the banking sector to crisis in the case of government instability and weak fiscal space.