Corresponding Banks have slashed their credit lines to Ghana Oil traders have huge receivables from Bulk Oil Distribution Companies (BDCs); their credit teams are jittery on their exposures - and so are their banks. BDCs can’t get hold of forex to settle existing liabilities; For some BDCs US$ is unavailable; For many BDCs they need to top-up the Cedis collected from OMC for products sold as the rate has moved and more Cedis needed to buy the US$; Last week a number of cargoes were diverted ; Cargoes currently at anchorage and those due in the next few weeks stand a high probability of being diverted to other countries as BDCs face forex crunch; BoG providing $120m each month while BDC industry needs $350-450 a month Stock levels will be 3-4 weeks at most at the end of the week. What Govt needs to do immediately? BoG needs to immediately allocate more forex to BDCs to pay for backlog payables so that banks can free credit space for new Letters of Credit or other payment mechanisms to be re-activated. NPA, the Regulator needs to step in with alacrity!!! NPA needs to bring some discipline in BDC markets as some BDCs are using the same collateral for multiple suppliers: - OMCs are increasing their exposure to multiple BDCs especially those whose exposures to their primary BDCs are in default; This poses a systemic risk in the industry; - NPA needs to reinstate the cross-default mechanism so that each OMC exposure to each BDCs is known and thus their total exposure is known.