Ghana mulls completion of external debt restructuring soon

Ghana's President, Nana Akufo Addo, has reassured the nation that the external debt restructuring process will be completed soon, despite the recent Cabinet reshuffle that saw the removal of Ken Ofori-Atta as finance minister. The President emphasized that this change in leadership would not impact the ongoing negotiations with the International Monetary Fund (IMF). Karen Kwarteng, Head of Global Market Sales at Standard Bank, provided insights on the State of the Nation address and the country's progress towards securing agreements with euro bond holders. The President's address highlighted the government's commitment to achieving debt sustainability and meeting fiscal targets. He outlined the timeline for finalizing the debt restructuring deal by the end of Q1, aiming to unlock further funds from multilateral sources like the World Bank. Kwarteng acknowledged the concerns raised by critics regarding the potential delays in reaching the March deadline for the euro bond issuance agreement. However, she commended the government's efforts in navigating the debt restructuring process efficiently, comparing Ghana's progress to that of other countries like Zambia. Despite some challenges and delays, Kwarteng expressed confidence in Ghana's ability to meet the set timeline for the debt restructuring programme. Shifting the focus to monetary policy, Kwarteng discussed the recent developments in Nigeria's Monetary Policy Committee (MPC) announcement, which included a significant NPR rate hike. In contrast, Ghana had previously implemented a rate cut and witnessed a slight uptick in inflation numbers. As the country prepares for the upcoming MPC meeting, speculations arise regarding the potential policy stance to address inflation concerns. Following a gradual decline in inflation rates, Ghana experienced a 30 basis point increase, primarily driven by rising food inflation in January 2024. Kwarteng suggested that the MPC might adopt a cautious and accommodating approach in response to the recent uptick, postponing any rate cuts until May 2024 to assess the impact of the base effect movements. Overall, Ghana remains steadfast in its commitment to finalizing the external debt restructuring and sustaining economic stability amidst policy adjustments and evolving inflation dynamics. The government's proactive measures and strategic engagements with international financial institutions underscore its determination to navigate through the current economic challenges.