A former Executive Director of Standard Chartered Bank, Mr. Alexander Kofi-Mensah Mould, popularly called Alex Mould, has warned that the Akufo-Addo government’s debt exchange programme will have dire implications on the Ghanaian economy.

According to him, if the debt exchange programme is carried out in its current form, it would result in many banks losing as much as 60% of their revenue since they depend on government treasury bonds.

“To be blunt, most banks will be making losses when you combine this loss of income with the high default rate on loans to SMEs and corporates,” he emphasized

In a Facebook post, he said the main implication of the proposed debt exchange would be a general slowdown of the economy and “we will either not grow as anticipated, and, perhaps, even not exceed 2% GDP growth this year.”

He said government will have no other option than to cut down its discretionary expenditure and other non-productive policy programmes.

“We also expect a reduction in the construction of new roads as well as a slowdown in road maintenance, and a lot of non-essential government workers’ salaries being delayed or not paid at all, etc i.e. more expenditure accruals,” he stated.