Ghana’s fund managers, unable to access deposits tied-up in failed banks, will receive bonds directly from the government to boost liquidity, according to two people with direct knowledge of the matter.

Money managers have been struggling to meet withdrawal requests from customers, cover their costs or make fresh investments. Their funds are locked up in second-tier lenders that lost their licenses after regulators last year clamped down on smaller savings and loans companies to strengthen the industry.

To ease the fund managers’ liquidity problems, the government in April paid them 4.4% of the deposits they had with the collapsed institutions in cash. The balance was covered by five-year zero coupon bonds in state-owned Consolidated Bank Ghana Ltd., which was created out of some of the failed lenders.

But the discounts being offered to convert the CBG securities into cash with the lender were too steep for fund managers, said the people, asking not to be identified because the talks are private. Those bonds will now be canceled and replaced with direct government debt that will be easier to trade for cash instead of holding until maturity, they said.

The government is willing to top up with additional bonds to make up for haircuts suffered by fund managers when they convert the debt, the people said.

Covering potential losses will add to Ghana’s rising debt levels. The International Monetary Fund disbursed about $1 billion in emergency funding in April to help the country deal with the fallout of the coronavirus.

“What we are seeking is to make the bonds more tradable, even though cash is optimal,” Marian Maanaa Dsane, executive secretary of the Ghana Securities Industry Association, the umbrella body for money managers, said, declining to comment further.

Minister of Finance Ken Ofori-Atta did not answer calls to his mobile phone or respond to a text message seeking comment. A spokeswoman for the ministry said she cannot provide immediate comment because there was a cabinet meeting.

The re-issued bonds will cover all fund-manager claims that have not yet been redeemed in cash, according to the people, and will continue to not pay interest. The original bonds amounted to about 1.79 billion cedis ($309 million).