“Launch of Financial Stability Fund Imminent as $750 Million is Allocated for Operations”

The Ministry of Finance is set to disburse US$750 million from the newly established Financial Stability Fund (FSF), which translates to approximately GH¢9 billion, or 60 percent of the GH¢15 billion aspirational target. The FSF aims to strengthen Ghana’s financial system by promoting macroeconomic stability and providing short-term liquidity to eligible financial institutions. The fund will act as a buffer against any unintended shocks to the financial sector. The disbursement will provide solvency and liquidity support to eligible financial sector institutions affected by the domestic debt exchange programme (DDEP).

The Minister of State responsible for Finance, Dr. Amin Adams, noted that the government is aware of the potential impact of the DDEP on the financial sector and is taking necessary measures to mitigate any negative outcomes. He called on other development partners to support the efforts regarding the fund. The disbursement will come as a relief to stakeholders in the financial sector, who have been adversely affected by the local debt restructuring program. The recent earning statements of banks have shown the impact of mark-to-market losses on investments, higher impairments on investment securities, loans, and rising operating costs.

Dr. Richmond Atuahene, a banking consultant, welcomed the development, but called for increased clarity on the modalities associated with the fund. He noted that the fund is meant to cater to a number of financial sector institutions, including fund managers and other capital market players, who are also feeling the strain of recent happenings.

The FSF disbursement is part of a wider set of measures instituted by the Financial Stability Council to minimize the impacts of the DDEP and other factors on the financial sector. The central bank has indicated its readiness to provide exclusive support for banks during this period. The government has achieved a staff-level agreement with the International Monetary Fund (IMF) and has made substantial progress on the debt-exchange program and its engagements with bilateral creditors to secure the necessary financing assurances required for the IMF program.

Leave feedback about this

  • Quality
Choose Image
Choose Video