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Debt exchange brouhaha will affect savings culture – Investment Consultant

An investment consultant, Richmond Kwame Frimpong has pointed out a worrying trend in the country’s fiscal space.

He believes the current Domestic Debt Exchange coupled with the COCOBOD bill default have the potential to create a gap that can threaten the savings culture in the country.

Mr Frimpong made this remark in an interview on The Probe on Sunday.

According to the consultant, the country had come a long way in encouraging its citizens to appreciate the culture of savings and investments.

This is why he fears that the citizenry may lose faith in the system due to the prevailing circumstance.

“Many people believed at least by now, that if for nothing at all, if I had bought anything that was a fixed term instrument from… cocoa bill or if I bought a treasury bill or even if I bought a bond, it is an instrument that is having a near zero risk and if now it cannot be saved…

“And now I decide to make another attempt after all the loses, to now get some more security… and now that is becoming a challenge, the gap it’s going to create for the culture of investment is going to be difficult.

“And now, almost everybody is saying that it’s even risky to put money in the bank, that is going to become a bit more challenging for the country going into the future,” he stated.

Mr Frimpong, therefore, suggested two solutions that government could undertake to rectify this issue.

The first was that the banking, insurance, pension industry, and investment industry must up with a coordinated working plan that would be able to salvage the crisis that the ecosystem is facing.

Additionally, he advised that adequate communication be made to the general public to enable Ghanaians to understand and appreciate what is happening.

Mr Frimpong also made the clarification that the cocoa bill was not the same as treasury bills.

“If treasury bills are exempted, so to speak, we should not translate that to mean that the potential default on this cocoa bill means if you have a treasury bill, it is going to experience the same thing.”

Source: Ghana News

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