By Maxwell Nkansah Amid the imminent restructuring of the nation’s public debt, bankers in the country are entreating managers of the economy to be circumspect in their decision-making so as not to destabilize the budding financial sector and erode recent gains made, especially as it pertains to investor confidence. At the 39th Annual General Meeting (AGM) of the Ghana Association of Bankers (GAB), there was evident and palpable concern about how the restructuring would impact the asset structure, earnings, and operations of banks. At the meeting, its president, Mansa Nettey, said that inasmuch as the central government is taking the necessary actions to achieve debt sustainability, this should be done in a manner that does not erode gains made in the sector. "The government must ensure that this is not done at the expense of financial sector stability, undoing much of what has been accomplished in strengthening the banking sector—as a sound and stable economy requires an equally sound and stable banking system, one that can support the country's long-term goals." According to budget figures, the country spent GH20.5 billion (US $2 billion) on debt service in the first half of the year, accounting for 68 percent of tax revenue. By the end of June, the total amount owed by the government had risen to GH393.4 billion, or 78.3 percent of GDP. In response, the central government started a proposed three-year Enhanced Domestic Programme engagement with the International Monetary Fund (IMF) in July for US$3 billion, joining a number of emerging markets that are being forced to default or restructure some of their debts this year. This was done after efforts to halt the sale of its Eurobonds and a record depreciation of the cedi against the dollar failed, including cuts of up to 30% in discretionary state spending. Mrs. Nettey – who doubles as chief executive officer of Standard Chartered Bank – further stated that while the industry recognizes that drastic measures need to be taken by the central bank to effectively combat inflation, it is necessary that banks are encouraged with regulatory incentives to soften the impact. "We recognize that the Bank of Ghana had to front-load the tightening; however, it is necessary that they are provided with regulatory incentives to help them navigate the current economic challenges and continue to support the economy," she argued. She stressed the importance of banks reviewing existing operations and investment strategies to ensure long-term performance while remaining risk-aware and implementing effective credit management processes. At a recent engagement on Joy FM’s NewsFile, the Director of the Financial Sector Division at the Ministry of Finance, Sampson Akligoh, offered assurances that the government will take into consideration all stakeholders and not do anything to jeopardize the domestic financial sector. Following the Fund’s approval of a US$1.3 billion scheme for the southern African nation, Zambia will restructure its debt through a combination of haircuts to the initial value of its loans and maturity extensions. The process of renegotiating debt that will total US$17 billion by the end of 2021 has begun. This continues to be a critical milestone in the southern African nation’s quest to restructure its debts and restore an economy decimated by poor management and COVID-19; it allows the IMF to make an immediate payout of around US$185 million. By 2020, Zambia's debt had reached 120 percent of its GDP, making it the first African country to default as a result of a pandemic.