Nigerian banks record hugelosses on Ghanaian debt securities
Godwin Emefiele Governor Central Bank of Nigeria1
Godwin Emefiele, Governor of the Central Bank of Nigeria
Nigerian bank leaders filing for bankruptcy and subsidiaries in Ghana have lost more than 224billion naira from Ghana's debt restructuring program which is set to expire at the end of 2022, according to their separatelyaudited financial statements.
Apart from FBN Holdings,which has yet to release its audited report, other banks in the Tier 1 sector said they experienced a net loss of N224 billion in deposits. Collection of Ghana released. In its debt policy caused by the financial crisis, the authoritiesannounced the suspension of all debt service and external debt, a measure designed to restore macroeconomic stability, amid the economic and financial crisis of the country .
Remember that thegovernment of Ghana introduced a voluntary housingdebt relief program as a basisfor obtaining support, because debt burden affects the country's economic situation. This debt program is the first step in Ghana's debt recoveryexercise, which is a prelude to a three billion dollar bailout bythe International Monetary Fund. MarketForces Africa reported that Ghana has requested financial support from the International Monetary Fund (IMF) to manage its economic crisis which has resulted in high public sector costs. Total public debt amounts to more than100% of Ghana's gross domestic product (GDP) and debt service costs account for 70-100% of the country's income.
The debt swap, according to theNigerian bank, is seen as an invitation to voluntary swap of about US$15.99 billion of existing debt owed by various investors. rural areas. As part of efforts to reform its debt, the government has extended payment dates and reduced coupon rates. The program also includes some incentives for legal entities. Due to debt burden and pressure from external markets, Ghana'seconomic situation has deteriorated to the point that the government is looking for a lifeline from lenders in many areas. As part of its agreementwith the IMF, Ghana was asked to adjust its debt, and local and foreign investors were affected and did not join in the first place. Through their mutualinvestment in the Governmentof Ghana Securities, Nigerian lenders who have subsidiaries in the country have been asked to allow some losses by recording the value of the securities in the financial statements.
Banks that have been legitimately affected include Access Bank, followed by Zenith Bank, GTCO, UBA and FBN Holding, although Nigeria'soldest bank has yet to release its final audit report. CGT:
Guaranty Trust Holding Company Plc has disclosed about debt restructuring in Ghana, due to its investment in GTBank Ghana, which is a direct subsidiary of GTBank Nigeria Ltd -98% owned.
In its audited statement, GTCO said that it disclosed 167.557 billion naira and recorded 35.551 billion naira as breach of security and financial security charges. Supposed to be the main point of investigation, the auditor of GTCO Plc. However,said that the decision of the full provision for expected credit losses for loans and advances ininvestment securities is highly subjective and based on judgment.
To generate US dollar financing,the group is exposed to Eurobonds issued by the Government of Ghana, through GTBank Nigeria Limited, GTBank Sierra Leone, GTBank Liberia and GTBank Rwanda. "The government's effective debt repayment and debt restructuring plan has resulted in the Ghanaian government disclosing any loss-making entity, as required by IFRS 9 Financial Instruments," the directive said.
Go to Bank Plc
Access Bank Corporation Plc has suffered a loss of ₦103.10 billion due to economic losses caused by Ghana's nationaldebt crisis, according to its audited statement. It suggeststhat the consolidation paper only applies to national debt, as the Ghanaian government has not set the conditions forrestructuring Eurobonds.
"Although the restructuring process is subject to many uncertainties, it is considered that additional damages will be paid for this isolated event," the Nigerian bank said. The fair value of Ghana's royalties onthe books of the group is 348.15 billion naira, according to the report analyzed for 2022. In April, Ecobank said that the reduction of income to shareholders in the first quarter of 2023 in its disclosure. Thegroup said that $26 million is in Ghana's mortgage debt as a result of the exchange of old bonds for new ones under the Ghana's mortgage reform program.Government of Ghana.
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