Some banks in the country are hopeful the financial sector will soon have enough funds to propel the private sector towards growth.
The expectation is anchored on the 2.5 billion dollar energy sector bond which will soon be issued by government to release power producing and distribution companies from distress.
Speaking to Citi Business News at the sidelines of Ghana Economic Forum, the Chief Executive Officer of Zenith Bank, Henry Oroh forecasts that the bond will create adequate liquidity for onward lending to the private sector.
According to him, the 2.5 billion dollars will create enough funds for circulation to benefit the private sector.
“The current government is thinking of biting the bullet once. They are thinking of about raising 2.5 billion dollar bond that will provide liquidity. Under the previous arrangement, we wouldn’t see liquidity, we only see performing loans. For the legacy bond, the banks will have to invest in those bonds and those bonds will have to be repaid over say 5 years,” he said.
He was of the view that the impact may not be realized the moment the bond is issued but with time the funds will be redistributed in the financial sector.
He lauded government for the methods used in raising funds into the economy, which he adds is fiscally effective.
“The government is raising bonds from inside and outside the economy and paying those debts thereby injecting liquidity into the banks. Once that happens the banks will now have capacity to support the government more, and there will be capacity to support the private sector. It will be a platform to trigger growth in a very significant way going forward,” he noted.
By: Vivian Kai Lokko/Lawrence Segbefia/citibusinessnews.com/Ghana