Ghanaians should not hold out much hope for an economic recovery this year, David Ofosu-Dorte, Executive Chairman of AB & David Law Company has said.
Furthermore, given the ongoing debt restructuring, citizens should also be measured in their confidence in the financial sector rebound.
That is not all. For David Ofosu-Dorte, he anticipates more lay-offs and downsizing by cash-strapped organizations.
“I mean, a lot of organizations who will not have access to money to expand including those in the banking sector who have had the payments of their bonds deferred in the debt exchange will downsize. So expect a lot of lay-offs and tougher times”, he told Bernard Avle on the Point of View on Citi TV on Monday.
The government exchanged existing bonds for new ones with a more flexible interest payment plan as part of ongoing negotiations with the International Monetary (IMF) Fund to secure $3 billion in economic support for Ghana.
Following an economic downturn and difficulties in servicing its debt, the government implemented the domestic debt exchange programme to give itself more time to meet its fiscal obligations.
The programme has faced stiff opposition from groups and individuals since its announcement.
A staff-level agreement between Ghana and the IMF was achieved in December, opening the door for the $3 billion rescue.
Before the Bretton Woods institution’s board would evaluate Ghana’s request, one of the requirements is the domestic debt restructuring scheme.
Without the debt exchange programme, the government warns that the nation’s economy would collapse severely.
David Ofosu-Dorte however believes the financial industry and the lives of Ghanaians do not seem to look good at the moment.
“But this time, the tougher times will not be because of IMF conditionalities. It is the reality of the situation. The financial sector will suffer more because people will keep money outside the banks. People will keep money under the bed at home, in forex or in properties like real estate. Now, there is a trend of increasing purchases in safes and the price has even gone up so it means people are keeping their own money”, he stressed.