Advert Africa can exclusively reveal that certain banks and insurance businesses have begun to lay off employees in preparation for a challenging year in the financial services sector.
According to a letter obtained, two local banks told some employees that they will be outsourced or laid off.
Checks also indicated that several banks have given personnel notice of anticipated job cuts as boards try to trim the workforce.
The downsizing is the result of the domestic debt exchange scheme, which will have a big impact on banks, insurance companies, and asset management firms because they own significant amounts of government assets.
Advert Africa had already predicted major layoffs in the financial industry as debt restructuring became unavoidable in Ghana’s quest of a $3 billion IMF rescue.
“We have no choice but to lower our numbers in certain sectors to help minimize operating costs. Given the increasing economic uncertainties, we must be conservative with our resources,” a senior executive at one of the banks stated.
The domestic debt exchange appears to be further reducing income in several major business areas of financial service providers, causing shareholders concerned about profitability in 2023.
Apart from the covid-induced growth of 0.5% in 2020, the government already anticipates growth of 2.8% this year, one of the lowest in decades.
Firms are already preparing for lower earnings in 2023, as government assets, which account for the majority of their interest income, will offer zero returns this year.
However, the job losses have sparked protests between bank management and worker unions, with parent national unions urged to intercede.
One of Ghana’s major and largest insurers has also told its contract and some permanent employees that their positions will be terminated next month as the firm seeks to save costs.
The near-collapse of the secondary market as a result of the consolidation of all government bonds into four, which was later raised to 12, has already dampened activity, rendering investment firms obsolete.
Analysts are concerned that debt restructuring may erode all of the advances made in the financial sector following broad reforms that resulted in mergers and the cancellation of licenses for hundreds of enterprises.
