Finance-Pro Consult

12/01/2025

03/06/2023

As the pensioner bondholders continue picketing at the Finance Ministry today over unpaid coupons, the group has renewed calls for government to borrow from the treasury bills market to pay them.

According to the pensioners, the difficulties caused by the prolonged non-payment of their coupons and principals continues to bring untold hardship on them.

Convenor of the Pensioner Bondholders Forum, Dr. Adu Anane Antwi maintains even if government incurs more debt by borrowing from the treasury bills market, it can always repay.

“Government should borrow from the treasury bill market and pay off. It will increase the debt level a bit, but it is better. The President said people who die cannot be brought back. So, borrow from the treasury bill market to pay these vulnerable groups so they can live.

“If they are starved of their own money and they can’t buy their own medication and they die, they can’t be brought back to life. But if we borrow and raise the debt level a bit, it can be resolved”, he added.

On Thursday, the pensioners resumed picketing at the Finance Ministry following the failure of the government to pay their matured coupons and principals despite the rainy weather conditions.

Three weeks ago, the pensioners held a similar protest demanding payment but suspended the picketing after it had a meeting with the Finance Ministry over their grievances.

However, after two weeks the government is yet to engage the pensioners on the way forward, with some coupons still outstanding.

Meanwhile, a Deputy Finance Minister, Abena Osei Asare, has made a passionate plea to the Pensioner Bondholders, urging them to exercise patience as the government scrambles to secure the necessary resources to settle them.

She emphasized that the government is not intentionally neglecting the payment of outstanding coupons. Instead, the delay is primarily caused by the unavailability of funds and the prevailing economic crisis.

“We don’t intentionally stop them, sometimes it’s difficult, it is the ability to pay and so when it is not there it becomes a challenge, but we also have to communicate that to you. So, for now, our focus should be on the five outstanding, and then we talk about how we will manage the principal payment.”

“I sincerely appreciate where you are coming from. This has never happened when coupons are ready for payment and the government is struggling to pay, but currently, we all know the circumstances we find ourselves in, so I will plead with you so let’s sit and clear, and then we will see the way forward.”

02/09/2022

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01/09/2022

$750m Afreximbank loan received in full; $37m set aside for debt resolution

Deputy Finance Minister, John Kumah says government has received the full loan amount of $750 million from the African Export-Import Bank (Afreximbank).

The disclaimer was issued after ranking member on the Finance Committee in Parliament, Cassiel Ato Forson made comments indicating the bank account of government had received only $713 from the total amount in the loan agreement.

Deputy Finance Minister, John Kumah in a statement on social media refuted such claims and explained the Ministry of Finance occasionally generates escrow accounts for certain resolutions, in this situation the sum of $37million was set aside by the Finance Ministry for debt servicing.

“This arrangement is not new as the Ministry of Finance has from time to time created specialized Escrow accounts for specific purposes. In this particular transaction, an amount of USD37 million from the facility has been set aside for debt service obligations. All the documentation relating to this arrangement were supplied to and was approved by Parliament,” he stated.

He added that government was appreciative of Afreximbank’s efforts and assured Ghanaians that the funds received will be used for infrastructure projects as Parliament agreed on.

Parliament approved a $750 million loan agreement with Afreximbank for funding infrastructure projects and budget support.

The loan is part of a $1 billion dollar facility, the government is seeking to shore up its reserves as well as to pay for several infrastructure projects across the country.

The Minority previously opposed the loan agreement but threw its weight behind it during the debate to avert what they termed as a collapse of the country’s economy if the loan was not approved.

01/09/2022

Mr Kenneth Thompson, Chief Executive Officer of Dalex Finance Company has described Ghana's economy as fragile and bedevilled with huge challenges.

He said the economy could crumble under any major economic shock such as crop failure or sharp fall in commodity prices.

Mr Thompson in a mid-year review of the economy with the Ghana News Agency in Accra, urged the government to marshal all resources to fight against the invading Fall army worm as "it is an economic and security threat to the nation."

The army worm has been found in the Eastern, Brong Ahafo, Ashanti and Western Regions and had destroyed more than 5,870 hectares of maize, cowpea and cocoa since 2016.

He said in 2016, the Fall Armyworm invaded maize crops in Zambia and by January 3, 2017 about 90,000 hectares were affected, according to reports released by the Zambian government's Disaster Management and Mitigation Unit.

Mr Thompson said the 2017 budget showed that, Ghana's domestic revenue hit GH¢30.2 billion in 2015 and rose marginally to GH¢36.4 billion in 2016.

He said 40.7 per cent of domestic revenue was used as compensation to employees in 2015 and 46.2 per cent spent on employee compensation in 2016.

He said the government spent 30.7 per cent of domestic revenue in 2015 on interest payments, which jumped to 32.0 per cent in 2016.

Mr Thompson said Ghana spent approximately 71.4 per cent of domestic revenue in 2015 on emoluments and interest payment, which jumped to 78.2 per cent in 2016.

"We spent over 70 per cent of our income on two items. We are on the same trajectory half-year down 2017 nothing has changed...Government domestic revenue is estimated at GH¢45.0 billion, an increase of 33.5 per cent over the 2016 figures.

"Non-Oil revenue and grants projected at GH¢42.6 billion in the 2017 budget, is an increase of 29.2 per cent over 2016 and oil revenue also estimated at GH¢2.4 billion, an incredible increase of 231.2 per cent over the 2016 figures," he said.

Mr Thompson said the size of government, the level of borrowing, low government revenue, the exchange rate, the army worm invasion, the debt at the financial sector and disposable income were bad news for the country.

He observed that the local currency was overvalued and government spent huge resources to supplement the cedi.

"If devaluation is managed, the amount saved can be used to support other key sectors of the economy,"� he said.

Mr Thompson said interest rates had dropped from 32 per cent to 23 per cent and that was good for the economy if sustained, because it would promote investment.

23/10/2019

Odotobiri Rural Bank strengthens credit risk policies to prevent loan defaults.

The Management and Board of Odotobiri Rural Bank have said they will not relent in efforts to improve loan quality portfolio of the bank to boost profitability.
It has therefore increased the bank’s loan security by between 140 and 150 per cent, which is higher than the new guideline in the financial ACT minimum benchmark of 120 per cent.
The move has been necessitated by high non-performing loans and credit loss.

Lending operations

At the close of the year, the bank extended total loans and overdraft facilities of GHS37,438,150, representing an increase of 20.08 per cent.
Despite the 20 per cent increase in loan advancement, the bank’s profit declined by 16.62 per cent lower than that of 2017 profit.
Due to the turbulence and volatility in the financial sector, though it made a reasonable profit of GHS2,787,688, it was a decline from GHS3,355,078.
At the 32nd Annual General Meeting, Chief Executive, Siaka Baba Ahmed, says the best way to is to strengthen the credit risk policies so that you will be able to tighten and do away with people who would naturally would not pay loans.

“With the introduction of the new Act, before you give loans to anybody you have to get security which is about 120 per cent of whatever money you are giving out and we have even increased it depending on the sector. If it is a risky sector we go to 140 or 150 per cent.
"Somebody brings you money and you don’t know when they are coming for it but you give it out to some people who will not pay for three to four years,” he Siaka Baba Ahmed said.
Mr Ahmed continues, “So we also have to make sure that whatever money goes out, we try and get it. And you know this time the terrain is very tough, if you don’t manage your risk very well, you will collapse your business.”
The bank is careful to select people who are capable of paying and people with the right business cash flow and people with right security so that even if customers fail to pay, there is something to fall on to cover the loans.

20/06/2019

Local banks in the country are set to benefit from a €750 million guarantee from the European Commission under the NASIRA financial programme which uses guarantees to allow local banks to on-lend to underserved entrepreneurs within the European neighbourhood and Sub-Saharan Africa.

The aim of the NASIRA programme is to create 800,000 jobs and boost access to finance for people such as migrants, the youth and women who usually struggle to access funds.

It targets portfolios consisting of loans to youth, females and migrant entrepreneurs (including refugees, returnees and internally displaced people) and the goal of these guarantees is to allow local banks to provide loans to groups they normally perceive as too risky.

Speaking at a lecture on Africa-Europe Alliance, which was organised by the Council of Foreign Relations Ghana, the EU Commission Vice President for Jobs, Growth, Investment and Competitiveness, Mr Jyrki Katainen, said “this tool is for you.


The local banks in Ghana will benefit from this guarantee and it will allow them to invest in some of the cutting-edge ideas that would otherwise be too risky for them to support.”