The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has disclosed that the Ghana Financial Stability Fund has taken off.
He made the announcement at a press briefing after the Monetary Policy Committee meeting.
“What maybe left now is the official launch by the Finance Ministry”, he said.
Dr. Addison was optimistic the fund will help the country’s economic recovery drive.
What is the Ghana Stabilization Fund?
The Fund seeks to mitigate the potential impact of the Domestic Debt Exchange Programme on the financial institutions.
Parallel to this strategy is the development of the Insurance Sector Strengthening Strategy (ISSS,) which is a sub-strategy to be implemented with the assistance of AfDB by 2024.
Governance structure of fund
To ensure effective governance of the Fund,
a. The Fund will be governed by a nine member Investment Committee (IC), with four (4) independent experts recommended by industry associations and approved by the MoF.
b. Development Partners may recommend observers to the committee subject to the approval of the Minister for Finance. Other DPs may support Fund A or B on terms to be agreed with the Government of Ghana.
c. BoG and other relevant regulators will approve recapitalisation plans, instruments, and criteria for their respective financial institutions. Based on these, the IC will take investment decisions regarding eligible financial institutions.
d. GAT will serve as the secretariat for Solvency Fund A2 and will set up a ring-fenced operational framework for managing the Fund.
e. Fund A1 will have a project unit at Ministry of Finance as pertains to World Bank funded projects
Government to invest some $500 million
Government has announced that it will invest $500 million as seed capital in the Fund.
This was captured in the Operational Document of the Fund released by Finance Ministry on October 9, 2023.
Source: Myjoyonline
