Former CEO of Stanbic Bank, Alhassan Andani, expressed deep concerns over Ghana’s economic situation, particularly regarding the Domestic Debt Exchange Programme (DDEP), which he described as a historic moment of financial distress as reported by Ghana Web on Friday, November 8, 2024.
Andani, who has over three decades of experience in the banking industry, said the government’s inability to fulfill their debt obligations marred a dramatic change in the country’s financial system.
At the Ghana CEO-Presidential Gala Dinner, Andani said, “In my life in banking—it’s been over 30-plus years—I’ve never seen the government broke.”
He further stated, “The government had never been broke until we declared the DDEP. No matter how long the government owed you money, ultimately, they would pay you.”
The declaration of the DDEP, which occurred two years ago, sent shockwaves through the financial sector as it revealed that the government could no longer meet its bond obligations.
Andani emphasized the significance of this moment, noting that it fundamentally changed the relationship between the state and private creditors.
Ghana’s economy, Andani stated, has always struggled with low capital accumulation, which makes government support vital for private sector growth.
On the country’s past, he pointed out that in 1979, the wealthiest individual in Ghana had just $25,000 to their name. Despite periods of economic growth, Ghana’s private sector remains underdeveloped compared to other emerging markets.
The former banker expressed particular concern about the impact of the government’s default on private bondholders, stating, “For a government to say we cannot pay… bonds that we have issued, especially to private sector people, that for me is the most shocking.”
He warned that this situation could severely undermine confidence in Ghana’s investment environment, as private capital is crucial for economic development and job creation.
Looking toward the future, Andani called on policymakers to prioritize economic reforms aimed at creating room for the private sector to recover.
He suggested, “Maybe in the new government, we could phase out some programs, push the social programs back a couple of years, and give the private sector space to recover.”
