Upwards trend in Ghana’s interest payment (debt servicing costs) due to it unsustainable debt levels, is expected to continue to exert upward pressure on government spending, Fitch Solutions has predicted.
The elevated interest payments, which has brought a situation of tight external and domestic financial conditions since 2022, will created a budget financing gap.
This is not particular with only Ghana but with Uganda and Nigeria as well, the UK-based firm, in an article titled “Return To International Capital Markets Belies Persistence Of Fiscal Risks In Sub-Saharan Africa,” indicated.
“Many governments across the region will continue to rely on domestic and external borrowing to cover fiscal deficits in 2025”, the article highlighted.
This comes as Sub-Saharan Africa (SSA) experiences mixed progress in fiscal consolidation.
Efforts to reduce deficits through tax measures are likely to face challenges due to structural revenue constraints.
Domestic yields remain elevated, despite a gradual shift towards monetary easing in the region.
In the second quarter of 2024, the quarterly GDP-weighted average of SSA’s 10-year government bonds reached 12.63%, surpassing the previous peak of 12.62% seen in the final quarter of 2022 after Russia’s invasion of Ukraine and the subsequent tightening of global financial conditions.
The spread between SSA bonds and US 10-year Treasuries also widened, reflecting domestic challenges, including monetary tightening in Nigeria and election-related volatility in South Africa.
By the fourth quarter, yields remained high in countries like Nigeria and Kenya, driven by ongoing monetary tightening and heightened political risks.
The Agricultural Development Bank (ADB) PLC under the leadership of its Managing Director, Alhassan Yakubu-Tali has recorded sterling results for the bank for the first nine months of 2024.
According to the Bank’s published financial figures for the first nine months of 2024, the bank recorded impressive profit before tax of GHC176.414 million compared with GHC26.999 million recorded during the same period in 2023, representing a profit growth of over 600 percent.
Profit after tax stood at GHC111.827million for the period under review compared with a profit after tax of GHC2.040million recorded during the same period last year. percent.
The liquidity ratio of the Bank also grew from 91.94% in 2023 to 125.55% as at end of September, 2024, and deposits have also witnessed significant growth from GHC7.75 billion to GHC11.15 billion.
This remarkable record could be attributed to hard work and commitment on the part of Board, Management and Staff to make the bank more robust and also to maintain its position as one of the market leaders in the banking industry.
The Agriculture Development Bank which operates with a universal banking license that allows it to undertake all banking and related services embarked on an aggressive recoveries of the non-performing loans in an effort to clean it books.
With the new capital and improved recoveries, the bank expects to exceed the Capital Adequacy Ratio (CAR) and the unimpaired regulatory capital position by the year end 2024.
ADB PLC recently received several 5-Star ratings at the Chartered Institute of Marketing Ghana (CIMG) Customer Satisfaction Survey Index Report Launch and Awards Night.
The recognition is a direct consequence of the development and implementation of a customer care and service quality strategic pillar as part of a two-year corporate strategy introduced by the Bank in 2023.
The bank garnered5-Star Ratings in: Customer Satisfaction – Consumer Banking; Customer Satisfaction – Business Banking; Service Quality – Consumer Banking; and Service Quality -Business Banking. The Bank was also adjudged the First Runner-Up position in Business Banking Service Quality.
With an increasing investment in digital banking and service efficiency, ADB continues to be among the leading banks, setting benchmarks for innovation and excellence in Ghana’s banking industry.
As customer expectations rise, ADB’s ability to adapt and improve makes it a trusted and reliable choice for both individual and business clients alike.
As he edges to the end of his campaign rounds, Dr (Alhaji) Habibu Adramani, Former NEC Member of NDC, has presented branded T-Shirts to some selected constituencies.
The donations presented to the Parliamentary Candidates to is aid their campaign activities and improves H. E John D. Mahama (Flagbearer of NDC) and the party’s visibility in the various constituencies.
So far, Hon Mutawakilu Garlus, MP of Damango, Hon Naa Koryoo, PC of Awutu Senya East and 5 other candidates have received 500 each of NDC branded T-shirts.
Dr (Alhaji) Dramani, the one-time longest serving Constituency Chairman, known for his unflinching support to the NDC since its inception called on the beneficiaries constituencies to work hard to redeem the parliamentary seats to help make NDC win majority in the next Parliament.
He said, NDC majority will make John Mahama’s presidency a successful and memorable one in the history of Ghana’s democratic politics.
After losing approximately 24 percent of its value against the US dollar, the Ghana Cedi is currently the fourth weakest or worst performing currency in Sub-Saharan Africa (SSA).
This is according to the World Bank’s October 2024 Africa Pulse Report launched last week. Ghana is ahead of Nigeria, Ethiopia and South Sudan with worst performing currency in 2024.
South Sudan’s pound recorded over 60% loss, Ethiopia’s birr (51%), and Nigeria’s naira (over 40%). In contrast, the Kenyan shilling has emerged as the best-performing currency in Africa, showing a year-to-date appreciation of about 21% as of August 2024.
“Ethiopia, Ghana, and Nigeria are among the worst-performing in Africa this year, with their currencies continuing to weaken under mounting pressure for foreign exchange,” the report stated.
It further explained that by the end of August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound had experienced significant depreciation.
The Nigerian naira, in particular, lost around 43% of its value due to the central bank’s heightened demand for US dollars in the parallel market, limited dollar inflows, and slow disbursement of foreign exchange to currency exchange bureaus.
On the other hand, some currencies that weakened in 2023 have seen a recovery or stabilisation.
The Kenyan shilling’s 21% appreciation stands out, while the South African rand and currencies pegged to it have strengthened by 3.1% this year, after significant losses in the previous year.
Despite these improvements, the report warns that exchange rate pressures and foreign exchange shortages remain major concerns for African policymakers.
More than a third of the 30 countries and two currency unions (the Economic and Monetary Community of Central Africa and WAEMU) surveyed are expected to have less than three months’ worth of import cover in international reserves by the end of 2024.
The Ghana Association of Banks (GAB) have adopted stringent measures to help in prompt threat and fraud detection and the management of such.
These initiatives are aimed at bolstering the banking sector’s defences against increasingly sophisticated fraud schemes as depicted in the Bank of Ghana’s (BoG) latest Fraud Report.
The report which was launched recently analyzed fraud trends from 2019 to 2023. The report unveiled alarming trend of fraud committed by internal staffs of banks among others. However, as part of GAB’s strategy to adoption advanced technologies like artificial intelligence (AI) and machine learning, it believes these cutting-edge tools can process vast amounts of data in real-time, enabling banks to detect suspicious patterns and transactions before fraud occurs.
The banks are advocating for the adoption of a “zero-trust” security framework, which requires continuous verification of users and devices within a system.
By minimizing the risk of insider threats, this framework ensures that no user or device is automatically trusted, thereby enhancing security.
Another key recommendation from GAB is the integration of blockchain technology, which provides a secure and transparent method for recording transactions.
This technology could help prevent document forgery and ensure greater transparency in banking operations.
In addition to technological solutions, GAB is pushing for improved staff vetting processes and the promotion of a strong ethical culture within banks.
Training programmes to foster ethical conduct, along with mechanisms to encourage whistleblowing, are seen as essential tools to combat internal fraud.
Whistleblowing measures would allow employees to report suspicious activities without fear of retribution.
Customer education is also a priority, especially with the growing use of mobile and online banking.
GAB urges banks to provide customers with the necessary knowledge and tools to safeguard themselves against digital fraud and cyberattacks.
Lastly, GAB highlights the importance of addressing employee well-being, acknowledging that financial pressures on staff can be a significant driver of internal fraud.
By fostering a supportive work environment and addressing employees’ financial stress, banks can reduce the risk of fraud driven by economic hardship.
These measures, according to GAB, aim to strengthen the banking sector’s resilience against fraud, aligning with the BoG’s broader goals of ensuring a more secure and stable financial system
Last week, the World Bank Africa Pulse Report, indicated a declining inflation across the Sub-Saharan Africa nations attributing it to the effects of monetary tightening and fiscal consolidation.
Also, the steady decline in commodity prices from their highs in 2022 contributing to the downwards inflationary trend as projected over the next three years.
According to the report, inflation in the subregion is expected to be 4.8 percent in 2024, down from 7.1 per cent in 2023. It is predicted to decline further to 4.6 percent in 2025 and 4.5 percent in 2026.
The report notes that the path of convergence to inflation targets will continue across African countries although at different speeds, and it may hit some bumps along the road if upside risks to inflation materialise.
The slowdown in inflation rates, it observes, appears to be broad-based: about 70% of the countries in the region are expected to have lower inflation in 2024 (compared to the previous year), and this proportion will increase to 80% in 2025.
Yet, inflation rates are expected to be higher than they were in the pre-pandemic period for about 70% of Sub-Saharan African countries.
Additionally, inflation among metal exporters is expected at 8% in 2024 and 6.4% in 2025, while that of oil exporters is set at 6.5% in 2024 and 3.3% in 2025.
High-frequency data suggest that central banks in Sub-Saharan Africa have made significant progress in the fight against inflation.
From its highest median rate of 9.9% year-on-year in October 2022, inflation decelerated sharply to 4.6% by June 2024.
However, the variability of inflation rates across countries remains high—with an interquartile range of about 12 percentage points this year, the report said.
This implies that some countries still face high inflation rates (double-digit rates) and the deceleration of inflation varies across countries in the region.
By June 2024, about 70% of the countries in Sub-Saharan Africa (30 of 43) had inflation rates that were low and declining, while the inflation rate for 13 countries (30%) was still high.
Nominal exchange rates appear to have stabilised by the end of June 2024, although at different levels across these two groups of countries.
Factors driving inflation include both external shocks (global supply chain disruptions) and internal shocks (such as macroeconomic imbalances, fragility, and debt hangover, among others).
These shocks not only create inflationary pressures but also jeopardise the stability of exchange rates.
At the same time, food inflation remains high and slightly volatile, while currencies have weakened sharply among countries with high inflation.
During this period, supply chain problems as a result of the war in Ukraine accelerated inflation from the second quarter of 2022.
Disruptions in the production of agricultural goods due to domestic conflicts and extreme weather events (droughts in Eastern Africa and the Sahel as well as floods in Southern Africa) also contributed to accelerating inflation in 2022, reaching peak levels in the first quarter of 2023.
The nominal exchange rates for the two groups of countries remained stable until February 2022 for the low-inflation countries and May 2022 for the high-inflation countries.
Currencies for the two groups weakened because of inflationary pressures arising from global geopolitical conflict.
The exchange rates of low-inflation countries depreciated until the fall of 2022 and then started gradually appreciating. The currencies of high-inflation economies depreciated further.
After reaching their peaks in early 2023, food and headline inflation began cooling—although the pace of disinflation varied markedly across countries.
In low-inflation countries, inflation increased at a slower pace than in high-inflation countries throughout 2022, while headline and food inflation started to decline gradually and protractedly in January 2023.
This group— which accounts for 70% of the countries in the region—is stabilising (headline and food) inflation at rates closer to their targets. The disinflation among low-inflation countries has also been accompanied by a strengthening of their currencies.
For the group of high-inflation countries, headline and food inflation appear to have peaked and stabilized at higher levels.
https://newsguideafrica.com/ editorial team acknowledge this as a welcoming news to the health of the economy and general standard of living as cost of living is expected to be steady and predictable over a period of months.
This helps in better economic and household expenditure planning.
Fidelity Bank Ghana has appointed Mr. Kwabena Boateng as its new Deputy Managing Director for Wholesale Banking, effective 1st October 2024.
Mr. Boateng brings more than 20 years of extensive banking experience to his new role, strengthening the bank’s leadership team.
Before this appointment, he served as Divisional Director for Corporate and Institutional Banking at Fidelity Bank, where he played a key role in driving the growth of the bank’s corporate banking portfolio.
Since joining Fidelity Bank in 2017, Mr. Boateng has been recognised for his strong leadership and strategic contributions, aligning his efforts with the bank’s overall objectives. His banking career has seen him hold leadership positions at Standard Chartered Bank, where he served as Executive Director and Head of Commercial Banking, Executive Director and Head of Commercial Clients, and General Manager of SME Banking.
In addition to his banking expertise, Mr. Boateng started his career as a civil engineer, overseeing major road construction projects across Ghana.
Commenting on the appointment, Mr Julian Opuni, Managing Director of Fidelity Bank, said, “Kwabena brings to this role a wealth of experience, strategic insight, and a proven track record of leadership excellence. His comprehensive understanding of the banking landscape, combined with his focus on innovation and customer-centricity, makes him the ideal candidate to drive our wholesale banking agenda forward and I am delighted to appoint him to this new role. I look forward to his continued success in elevating our banking services to new heights.”
Mr. Boateng expressed his gratitude for the opportunity, saying, “I am deeply honoured by this appointment and the confidence reposed in me by the Board and Management of Fidelity Bank. It is a great privilege to lead the Wholesale Banking Division at such a pivotal moment in our journey of transformation and growth. I look forward to working with my talented colleagues across the bank to deliver exceptional value to our clients while contributing to the overall growth of the bank.”
Mr. Boateng holds an MBA in Finance from the University of Ghana and a BSc in Civil Engineering from the Kwame Nkrumah University of Science and Technology (KNUST). He has also completed the Executive Programme at Harvard Kennedy School.
Fidelity Bank has congratulated Mr. Boateng on his appointment and wished him success in his new role.
The public has been encouraged to seek the services of qualified insurance brokers to ensure they receive accurate information and fair treatment in insurance matters.
According to the President of the Insurance Brokers Association of Ghana (IBAG), Mr. Shaibu Ali, “using a broker comes at no extra charge, as their fees are already included in the insurance premium under a section known as the “acquisition cost.” This cost compensates brokers for their services without adding any additional burden on the policyholder”.
Mr. Ali made this clarification during an interaction with the media at the Kempinski Hotel in Accra, on Tuesday, 8 October 2024.
Mr. Ali highlighted that “insurance brokers serve as independent, professional intermediaries, acting in the best interests of their clients. Their role is to help individuals and businesses select the right insurance products, negotiate fair premiums, and secure favourable terms from reputable insurers”.
He further stated that: “By working with a licensed broker, clients benefit from personalised advice tailored to their unique needs. Brokers ensure clients have the right coverage and assist them through the often complex claims process, providing guidance on necessary procedures and documentation”.
One major advantage of working with a broker, Mr. Ali pointed out, “is a smoother claims process. Brokers hold accountability for all aspects of the insurance policy and make it easier for clients to navigate the often-difficult task of filing claims”.
“With their deep understanding of the insurance market, brokers ensure clients are getting the best value for their premiums and dealing with trustworthy insurance providers. Mr. Ali also cautioned that individuals who purchase insurance from non-insurance institutions often encounter difficulties when making claims”.
Mr. Ali raised concerns over the increasing trend of financial institutions selling insurance products. He noted that “many clients end up having negative experiences because these institutions lack the professional expertise needed for insurance services”.
“This trend has contributed to much of the negative publicity surrounding the insurance industry, he explained. Furthermore, he noted that if a broker fails to renew a policy and a claim is made, the broker is liable and must compensate the client under their professional indemnity cover, which must be no less than GHS500,000”.
In recognition of the important role brokers play, Mr. Ali stated that: “IBAG has designated October as a month to raise public awareness about the value of insurance brokers. Established on October 27, 1988, IBAG began with 15 licensed broker firms and has since grown to 102 members”.
IBAG ‘serves as an advocate for insurance consumers, promoting public understanding of insurance and the importance of using licensed brokers’’.
With ongoing economic challenges, Mr. Ali stressed the need for individuals and businesses to ensure they have adequate insurance coverage to protect themselves from unforeseen events.
He said: ‘The public must endeavour to always purchase insurance from licensed and authorised providers to avoid complications down the road’.
He concluded by encouraging collaborations with the media to help demystify insurance, inform consumers of their rights, and enhance overall public understanding of the industry for improved financial security.
Newmont Corporation has announced that it will sell its Akyem operation in Ghana to Zijin Mining Group Co., Ltd. under a definitive agreement, for cash consideration of up to $1 billion.
The sale is part of Newmont’s ongoing programme to divest non-core assets as the company makes a strategic shift to focus on its Tier 1 assets.
Under the terms of the agreement, Newmont is expected to receive cash consideration of $900 million upon closing.
A further $100 million is expected to be received upon the satisfaction of certain conditions.
Newmont said in a statement that proceeds from the transaction will support its capital allocation priorities, including strengthening the balance sheet and returning capital to shareholders.
“The sale of Akyem represents continued progress on the non-core asset divestiture program announced in February, supporting our focus on the Tier 1 assets in Newmont’s portfolio that will drive sustainable growth and the return of capital to shareholders,” saidTom Palmer, Newmont’s President and Chief Executive Officer.
“We believe the proposed transaction results in the greatest overall value for Newmont shareholders and is the best strategic fit for Akyem. We are confident that Akyem will continue to thrive under new ownership with long-term benefits for local stakeholders and surrounding communities. The successful completion of this transaction will strengthen our confidence in Ghana as a favourable mining jurisdiction and Newmont will continue to support the growth and development of the region including our development of Ahafo North.”
“In line with President Akufo-Addo’s address in February we ensured that our robust divestment process provided equal opportunity for all potential buyers, Ghanaian and international, to participate,” saidRahman Amoadu, Newmont Managing Director, Africa.
“Additionally, we have included the Minerals Income Investment Fund (MIIF) in the process in preparation for their potential investment in Akyem to further Ghanaian interest in the mine.”
The transaction is expected to close in the fourth quarter of 2024, contingent on the satisfaction of customary conditions precedent, including regulatory approvals. As a result, the transaction is not expected to have a material impact on Newmont’s 2024 outlook and the Company has not adjusted its non-core guidance for the year.
Newmont said it remains committed to Ghana including the investment of $950 million to $1,050 million of development capital in the Ahafo North gold mining project in the Ahafo region of Ghana.
In connection with the transaction, Citi acted as Newmont’s exclusive financial adviser, Treadstone Resource Partners acted as strategic adviser, and Davis Graham & Stubbs LLP and Reindorf Chambers acted as legal advisers.
Ghana’s Minerals Commission has awarded Atlantic Lithium a mine operating permit for its flagship Ewoyaa Lithium Project in Ghana’s Central Region.
This permit represents the final regulatory approval needed before the company can begin construction of the project, which includes both the Ewoyaa lithium and the processing plant.
Mr Neil Herbert, executive chairman of Atlantic Lithium, described the permit’s issuance as a significant milestone in the permitting process.
“This marks a critical step for the Ewoyaa Lithium Project and is the final regulatory approval we need to commence construction,” he said.
Mr Herbert also expressed anticipation for the parliamentary ratification of the Ewoyaa mining lease, which is expected during the upcoming parliamentary session resuming on October 15.
“With our sights set on achieving first production of lithium in Ghana, we hope the ratification can occur soon, paving the way for the construction and operation of this globally significant lithium project,” he added.
Atlantic Lithium, focused on lithium exploration and development in Africa, aims to deliver Ghana’s first lithium mine as it awaits the necessary parliamentary approval.
