Dr Johnson Pandit Asiama, Governor of the Bank of Ghana (BoG), has proposed the establishment of a Business Rescue Fund to provide financing for distressed but viable businesses to preserve jobs, sustain production and support economic growth.
The proposed fund, he said, would operate within a predictable financing framework that would enable banks and other financial institutions to extend credit to eligible businesses without undermining their balance sheets or financial stability.
Dr Asiama made the proposal at a forum on restructuring distressed companies, non-performing loans (NPLs) and post-commencement financing, jointly organised by the BoG and the Chartered Institute of Restructuring and Insolvency Practitioners (CIRIP).
He noted that many businesses faced cash-flow challenges due to external shocks such as high interest rates, delayed payments, foreign exchange volatility and disruptions caused by the COVID-19 pandemic, rather than weaknesses in their underlying business models.
According to the Governor, the collapse of otherwise viable businesses reduces employment, tax revenues and Gross Domestic Product (GDP), making it imperative to establish mechanisms that preserve productive enterprises.
“A dedicated fund can provide working capital so they can retain employees, buy inputs and complete contracts. Without it, productive capacity is destroyed and creditors recover less,” he said.
Dr Asiama disclosed that funding options under consideration included unclaimed depositor funds, Government budgetary allocations and contributions from the private sector.
“The private sector, at the end of the day, are the beneficiaries, so they can also contribute to it. We are in the boat together,” he said.
He assured stakeholders that the central bank would support the initiative beyond its regulatory responsibilities.
Dr Asiama observed that although the Corporate Insolvency and Restructuring Act, 2020 (Act 1015), provides a legal framework for restructuring distressed but viable businesses, limited access to financing continues to hinder successful business rescue efforts.
He said lessons from Ghana’s banking sector reforms, which resulted in the closure of nine universal banks, highlighted the importance of establishing a disciplined business rescue framework backed by strong governance, accountability and oversight to protect financial stability while preserving viable enterprises.
The Governor urged banks to assess requests for rescue financing based on credible financial information, competent management, transparent corporate governance and sustainable cash flows.
He also called for stronger collaboration among banks, insolvency practitioners and other stakeholders to establish a predictable and risk-sensitive restructuring framework.
Dr Ishmael Yamson, Chairman of the occasion and Board Chairman of Scancom PLC (MTN Ghana), said Act 1015 was enacted to encourage business restructuring rather than liquidation by giving financially distressed but viable companies an opportunity to recover.
He explained that the law grants post-commencement financing super-priority over other claims to support business continuity, preserve jobs and maximise recoveries for creditors.
Dr Yamson proposed that post-commencement financing be excluded from banks’ non-performing loan calculations and loan growth restrictions during a defined business rescue period.
He also advocated additional financing mechanisms, including specialised distressed debt funds, syndicated financing arrangements with development finance institutions, partial credit guarantee schemes and targeted tax incentives.
He stressed that the ultimate objective should be to strengthen the financial resilience of businesses before they fall into distress.
“The primary objective should be to equip enterprises to manage finances soundly, so they don’t fall into distress. This means stronger early-warning frameworks, dedicated workout units in banks and better coordination between the BoG, insolvency practitioners and CIRIP Ghana,” he said.
Dr Yamson added that business rescue efforts should balance financial prudence with economic recovery by protecting depositors while ensuring viable Ghanaian companies receive a fair, transparent and supervised opportunity to recover and meet their obligations.
