Tough times ahead, financial sector crunch, and more layoffs – Ofosu-Dorte new update 1
Ghanaians should not expect an economic recovery this year, according to David Ofosu-Dorte, Executive Chairman of AB & David Law Company.
Furthermore, given the ongoing debt restructuring, citizens’ confidence in the financial sector’s recovery should be measured.
But that’s not all. According to David Ofosu-Dorte, he expects more layoffs and downsizing by cash-strapped companies.
Ofosu-Dorte view on the Economy
“I mean, a lot of organizations who will not have access to money to expand including those in the banking sector who have had the payments of their bonds deferred in the debt exchange will downsize. So expect a lot of layoffs and tougher times,” he said on Citi TV’s Point of View on Monday.
In December, Ghana and the IMF reached a staff-level agreement, paving the way for the $3 billion rescue.
One of the requirements for the Bretton Woods institution’s board to evaluate Ghana’s request is the domestic debt restructuring scheme.
The government warns that if the debt exchange program is not implemented, the country’s economy will suffer a severe collapse.
However, David Ofosu-Dorte believes that the financial industry and the lives of Ghanaians do not appear to be in good shape at the moment.
“However, the tougher times will not be caused by IMF conditions this time. It’s the truth of the situation. People will keep their money outside of banks, causing the financial sector to suffer even more. People will keep money under their beds at home, in forex, or in real estate. Now, there is a trend of increasing purchases in safes and the price has even gone up so it means people are keeping their own money”, he stressed.
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