Professor Isaac Boadi
Professor Isaac Boadi, the dean of the Faculty of Accounting and Finance at the University of Professional Studies, Accra (UPSA), says the banking sector has demonstrated remarkable resilience and growth one year after the implementation of the government’s Domestic Debt Exchange Program (DDEP).
Speaking on Atinka TV’s the Agenda Show, he highlighted significant improvements in the sector’s performance since the programme’s inception.
According to Professor Boadi, the banking sector has not only weathered the challenges posed by the debt exchange program but has also shown robust signs of recovery.
“A year after the DDEP, we can say that the banking sector is resilient,” he affirmed, noting a noticeable uptick in sectoral growth and a return to stability.
Key indicators
Professor Boadi cited an increase in bank assets from GHC 212 million in 2022 to GHC 270 million in 2023 as evidence of strengthened balance sheets.
He also pointed out a substantial improvement in return on equity, marking a shift from negative to positive growth, which reflects renewed investor confidence and operational efficiency within banks.
“The DDEP, announced by then Finance Minister Ken Ofori-Atta, aimed to enhance debt sustainability and restore macroeconomic stability. Under the program, existing domestic bonds were exchanged for new ones with adjusted terms, facilitating better financial management and reducing future debt burdens,” he indicated.
Results
Despite initial apprehensions, Professor Boadi emphasised that the programme had yielded anticipated benefits. “Though a bitter pill, the DDEP was unavoidable, and its fruits are now evident,” he indicated.
He highlighted the programme’s role in fortifying the financial sector against external shocks and positioning it for sustainable growth. He believes government is committed to uphold investor trust and ensure financial stability have been pivotal.
“Measures such as exempting Treasury Bills and safeguarding bondholder interests were instrumental in mitigating potential risks associated with the debt exchange, thereby safeguarding the banking sector’s stability,” he added.
He expressed the hope that Ghana’s banking sector is poised for continued recovery and expansion, buoyed by strengthened asset bases, improved financial indicators, and a supportive regulatory environment.
Professor Isaac Boadi
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