Accra — MISYS, the United Kingdom-based multinational software firm, argued Ghana's decision to engage the International Monetary Fund (IMF) for a bailout programme was not enough to solve the country's current economic woes.
Misys' Senior Risk Advisor, Bradley Ziff, explained that complementary efforts were required to rebuild the economy.
"There will need to be sustained efforts at reducing the budget deficit, allow exports to be denominated in both US Dollars as well as Cedis as well as improving the credit problems banks are facing," he said.
In an interview with CAJ News, Ziff nonetheless said the efforts of the IMF at this point were going to be essential to improve the ability for the country to stabilise the current economic problems.
Asked how the banking sector would benefit from the IMF bailout, Ziff said, "The IMF infusion of capital will assuredly come with a series of requirements for the government, working jointly with the Bank of Ghana to stabilize the debt, regain growth targets and stabilize the volatility of the Cedi."
Ziff had observed that there were a series of risks which he was confident from his recent dialogue with the Bank of Ghana that they were prepared to address.
"All those issues without exception cannot be solved by the government alone. They will require a stabilization of debt, lowering inflation, building out exports, imposing capital guidelines to ensure that the banks continue in sound shape," he added.
He said banks would need to significantly tighten their lending approaches to reduce the risk of further defaults.
According to him, the Ghanaian banking sector was challenged by many of the same issues which the broader economy in the country was coping with.
"Higher inflation, increased interest rates, foreign exchange volatility that has resulted in significant depreciation of the Cedi are all issues which are undermining growth in the banking sector. In addition, there are significant budget imbalances and significant de fault issues related to lending to the consumer and commercial sector," Ziff noted.