The former Member of Parliament for New Juaben South does not see any light in the immediate future and is concerned that the finance sector could crash.
Speaking in an interview with TV3, Dr Mark Assibey-Yeboah explained that the current events are going to limit cash inflow to the banks.
He also elucidated that the country’s external creditors may not be interested in giving the country needed loans going forward.
He warned Ghanaians to expect lay-offs from banking institutions in the country and that could mark the beginning of the crisis.
When he was quizzed by a TV3 reporter whether he believes the banking sector will crash, Dr Mark Assibey-Yeboah responded with a definite ‘Yes’ and went ahead to provide reasons for his position.
“Where we are now, this is not the time to massage issues. I don’t want to mention names but do you see the exposures of some banks? Some of them will collapse. Let’s say you are bank and you are exposed to government bonds to the tune of GH₵2billion even at 20%, that is GH₵400million in interest payments for holdings. Do you know what that will mean to your balance sheet?
“Very soon banks are going to lay people off. We haven’t even gotten to the external. Now, all projects for which we contracted loans, the IPCs are not doing anything so very soon you will see the Obestebi Interchange and all those construction works grinding to a halt because the external creditors are saying if you are going to suspend debt repayment then we are not going to advance any further loan,” he said.
On how the situation can be addressed, Dr Mark Assibey-Yeboah urged the government to take some responsibility and not impose everything on the citizens.
According to him, certain flagship programs of government will have to be rationalized along with the need to cut down on expenditure.
“I don’t know if we don’t appreciate the extent of the problem or we are hiding some information from somebody but where we are now there are no easy solutions out there. We have to look at revenue a bit more and close the loopholes. You can’t do all of this if you can’t do serious expenditure rationalization. We have to do expenditure rationalization,” he said.
As part of conditionalities to achieve the IMF bailout, the government has recommended that all benefit due bondholders in 2023 not be paid.
Per the arrangement, the payment of the benefits will resume in 2024 at the rate of 5%.
This arrangement has been widely criticized with critics saying that the government is worsening the situation of already burdened Ghanaians.