IMF Endorses Collapsed UT, Capital Banks Bond

The International Monetary Fund(IMF) said it supports Ghana’s plans to sell 1.6 billion cedis ($362 million) of bonds to settle the liabilities of collapsed UT and Capital Banks, a Bloomberg report has said.

The IMF country representative, Natalia Koliadina, disclosed that the proposal to sell the debt of the two collapsed banks was made by the government of Ghana during a staff visit from the IMF earlier this month.

The IMF in addition demanded that government reduces its planned Eurobond from one billion dolars to 500 million dollars.

The talks came after UT Bank and Capital Bank Ltd. last year failed to meet the Bank of Ghana’s requirements for capital adequacy, after which some of their assets were taken over by GCB Bank Ltd.

The chairman of the parliament’s finance committee, Mark Assibey-Yeboah, has said earlier in March that the country was planning to issue the bonds.
“There’s a gap between assets and liabilities that needs to be closed and the government is working on closing this gap,”
Koliadina said. “It has already been incorporated into our macro framework for this year.”
Ghana is in the final year of an almost $1 billion extended credit-facility program with the IMF under which the nation agreed to keep spending in check and reduce its debt.

Source: Bloomberg