News Guide Africa

Category: News

  • The signs of a stable cedi/dollar exchange rate in 2025

        Cedi maintains steady footing against the dollar in 2025, buoyed by policy discipline and gold exports.

     

     

    By Toma Imirhe & Elorm Desewu

     

    Considering that 2025 is another year during which Ghana will not have access to the international capital market it is only to be expected that both participants in the local economy and international direct investors would be nervous about the direction and quantum of the change in the exchange rate between the Ghanaian cedi and the United States dollar over the coming months.

    Indeed it would appear they have good reason to worry. The relative exchange stability enjoyed by the cedi during the latter years of the previous decade and the start of this one were primarily achieved by heavy borrowing of US dollars in the form of annual Eurobond issues of US$3 billion, most of which was used to prop up the supply of foreign exchange on the local currency market. However when the three international sovereign credit ratings agencies – Fitch, Moodys and Standard & Poors – all decided that Ghana’s public forex debt was unsustainable towards the end of 2022 and Bloomberg began justifying the resultant price discounts and consequent sharp rise in yields on Ghana-issued Eurobonds to investors still holding on to them, the real cost of this cavalier strategy became clear.

    Since then, the value of the cedi against the US dollar has fallen to barely a third of what it used to be, with a dollar trading for GHc15.56 by mid April 2025 on the interbank forex market – and a significantly higher GHc16.10 on the retail market –  compared with a little over GHc6 to a dollar as at the third quarter of 2022. Instructively the cedi’s free fall continued through to 2024, with the currency depreciating by 28% against the American greenback last year alone.

    But  Ghana’s pivotal change of government from the erstwhile profligate Nana Akufo-Addo administration to the much more fiscally restrained incumbent President John Dramani Mahama administration, coupled with favourable developments in the country’s key international commodity export markets have changed the exchange rate trajectory sharply. While the cedi still depreciated sharply during the first quarter of 2025 when the Mahama administration was settling in – by 5.36% against the dollar – this was followed by marginal appreciation at the start of April which narrowed the year to date fall to less than 3%, and relative exchange rate stability since then.

    Speaking after the 123rd Monetary Policy Meeting in late March, Governor of the Bank of Ghana, Dr. Johnson Asiama, announced a set of measures aimed at stabilizing the Ghanaian cedi, as the currency faces continued pressure against major foreign currencies.

    These include tightening monetary policy to control inflation, enhancing foreign exchange reserves and structural reforms to address exchange rate misalignment.

    Dr. Asiama stresses the need for monetary and fiscal coordination, inflation control, and structural reforms to restore confidence in the cedi.

    “On top of the projected steady growth for 2025, the international markets have priced in a much stronger US economy stemming from the policies to be implemented by the new US administration. This has already instigated a stronger US dollar with implications for emerging markets and developing economies, including Ghana” he warns.

    “Complementary fiscal and monetary policies will therefore have to be carefully set to prevent spillovers to the Ghanaian economy.

    “External sector conditions remain positive, with sustained and stronger-than-programmed rebuilding of reserve buffers contributing to the stability of the domestic currency. The performance of the external sector (in 2024) was mainly driven by strong growth in gold exports, which also largely impacted positively on growth. In the outlook, the external sector is expected to remain strong as commodity prices remain favourable amid improvements in production. Overall, while the external sector conditions are expected to provide an anchor to exchange rate stability, key risks in the outlook including challenges in the energy sector will have to be closely monitored.”

    Importantly he is backing his words with concrete action. The Bank of Ghana supported the foreign exchange market with US$264.4 million in March 2025 alone to preserve the stability of the cedi.

    Indeed, such interventions reflect the growing size of Ghana’s gross international reserves and the consequent ability to both provide forex liquidity in the local market and directly intervene in it when deemed necessary.

    Easily the biggest contributor to this newfound strength is gold, which is continuously setting new international market price records by the week. The price of a fine ounce of gold is currently around US$3,227 and is rising so fast that even Goldman Sach’s earlier forecast of a closing price for the year of over US$3,500 now looks much too conservative.

    Apart from enjoying the direct benefits of the ongoing unprecedented price surge, it is also encouraging investment in increased production in Ghana and, more recently, concerted efforts by the new government to formalize small scale mining (most of which has been illegal and environmentally unfriendly) and take control of the sale of the gold it produces, much of which has been smuggled out in the past.

    Databank Research expects the new government to prioritize domestic mining, boosting gold production to bolster reserves. According to its Ghana Outlook report for 2025 “In the aftermath of the elections, the new government may focus on enhancing domestic mining companies to boost gold production. This comes at a time when gold reserves have been steadily increasing in recent years, standing at 37.52 metric tonnes as of the second quarter of 2024, with projections indicating a rise above the levels recorded in 2023. We believe the move will further augment gold reserves and offer a potential cushion for the Cedi.”

    Oil prices are falling too but this is a double edged sword, favouring consumers who might be able to enjoy price cuts at the pump on imported petroleum products, and lower diesel import costs for powering thermal electricity stations, but putting government’s forex revenue target from crude oil exports in jeopardy.

    Cocoa prices are still hovering not too far behind the over US$10,000 per ton they peaked at last year and Ghana’s production looks set to exceed  its 617,000 target for the current crop season, but about a third of this is going into fulfilling supply contracts that the country defaulted on during the previous  disastrous crop season.

    Commodity prices on international markets – and to a lesser extent, production – are outside the complete purview of government itself, but the Mahama administration is proving prudent in the fiscal management and economic policy measures that it can control and these are already yielding palpable results which are not going unnoticed both at home and abroad.

    Databank Research predicts that political stability after the 2024 elections is expected to attract foreign direct investment (FDI) and portfolio inflows, easing speculative pressures on the cedi. Disciplined fiscal policies are projected to reinforce this recovery.

    “We expect a successful 2024 election to bring renewed confidence in the Ghanaian economy which should lead to increased foreign direct investment and portfolio inflows. This development would bolster investment sentiments around the cedi and reduce speculative attacks on the currency,” Databank Research notes.

    Indeed, following Ghana’s Eurobond debt restructuring in 2024, Moody’s and Fitch upgraded the country’s ratings, with Moody’s moving its issuer rating from “Caa3” to “Caa2” and assigning a positive outlook.

    Databank also predicts further upgrades as economic indicators improve, strengthening the cedi.

    “Following the successful Eurobond debt rework in the 3rd quarter of 2024, global rating agencies Moody’s and Fitch upgraded Ghana’s long-term local and foreign currency issuer ratings. Moody’s upgraded the issuer rating from “Caa3” to “Caa2” and “Ca”, respectively, and assigned a positive outlook,” Databank notes.

    “Fitch Solutions followed with the upgrades, assigning a “CCC+” to Ghana’s new USD bonds from the initial “CCC”. We expect a further upgrade as the rating agencies cited that continuous improvement in economic indicators would attract higher upgrades. We expect these developments to improve sentiments around the Cedi and allow for its stability,” the research firm predicts.

    Inevitably quantitative forecasts for the cedi’s exchange rate performance against the US dollar vary from one forecasting firm to another, depending on the specific nature of their econometric modelling and trend analyses. But instructively none of the forecasts predict major depreciation  during 2025.

    Coin Codex, an American economic and financial forecaster expects that in 2025, the exchange rate between the US dollar and the Ghanaian Cedi is anticipated to range between GHc 15.06 and GHc 16.91, leading to an average annualized price of GHc 15.90.

    World renown accounting and management consulting firm Deloitte predicts that in 2025, the improved investor confidence arising from the relatively peaceful election, the conclusion of the government’s debt restructuring negotiations, periodic International Monetary Fund (IMF) disbursements and higher gold export receipts will boost the international reserves level of the country and support the cedi’s value.

    Gov Capital Forecasts expects the US dollar to exchange at GHc15.70 by the end of the third quarter of this year.

    What all these forecasts have in common though is that the exchange rate will remain more or less stable through 2025 which means currency traders planning to take positions against the cedi – a major cause of cedi depreciation in the past – would be better off investing in government or Bank of Ghana bills which offer better returns on their investment.

     

     

  • IMF, WTO raise concerns over global trade tensions ….as major economies react to U.S tariffs adjustment

     

    IMF, WTO warn of global trade risks amid rising U.S. tariffs

     

    Adnan Adams Mohammed

     

    International Monetary Fund (IMF) and the World Trade Organisation (WTO) have waded into the escalating global trade tensions cautioning of grave consequences.

     

    According the IMF boss, Kristalina Georgieva, the rising trade tensions bring “uncertainty that is costly”, warning that the complexity of modern supply chains means that tariffs can disrupt the flow of goods and services.

     

    She has however appealed to the United States government and its trading partners to work constructively to resolve trade tensions and reduce uncertainty. The Fund had earlier noted that, the tariff measures announced by President Donald Trump pose a significant threat to the global economy at a time of sluggish growth

     

    “We are still assessing the macroeconomic implications of the announced tariff measures, but they clearly represent a significant risk to the global outlook at a time of sluggish growth. It is important to avoid steps that could further harm the world economy”, Madam Georgiava said in a short statement a fortnight ago while, reacting to the announcement of U.S. tariffs.

     

    “We appeal to the United States and its trading partners to work constructively to resolve trade tensions and reduce uncertainty.”

     

    She added, “We will share the results of our assessment in the World Economic Outlook, which will be published at the time of the IMF/World Bank Spring Meetings later this month”.

     

    Meanwhile, the World Trade Organization (WTO) is urging African nations to intensify intra-African trade as a strategic buffer against the impact of newly imposed global tariffs.

     

    Speaking at the opening of the WTO’s 2025 Forecast Meeting in Geneva, WTO Director-General Dr. Ngozi Okonjo-Iweala acknowledged that the impact of these tariff changes will not be uniform across the continent.

     

    “Whilst the present trade situation is being sorted out, including a plea for the possibility of tariff exemptions for most of Africa, since this is where the largest number of Least Developed Countries (32 of the 44) are found, I have a message for the continent itself. This message is the need for more self-reliance. The external environment has changed and is more adverse,” she said.

     

    She emphasized the importance of regional trade integration through the African Continental Free Trade Area (AfCFTA), stating it will be critical in helping countries cushion the effects of external shocks.

     

    “Aid is drying up and trade is becoming more politicized. So there needs to be a focus on raising domestic resources, attracting domestic, regional and foreign investments, on faster and greater trade integration within the continent such that intra-Africa trade is lifted well beyond the current 16%,” she added.

     

    She further highlighted lessons the world can learn from the ongoing global tensions “The first one is over-dependence: One of the clearest lessons from the COVID-19 crisis was the importance of diversifying sources of supply.

     

    Today’s trade tensions remind us that we must also diversify demand. Overconcentration—whether in where we buy from or where we sell to—leads to overdependence, making economies more vulnerable to shocks and fostering a sense of unfair burden sharing.”

     

    President Donald Trump on Wednesday, March 26, announced 25% tariffs on all cars shipped to the United States, a significant escalation in a global trade war.

     

    The tariffs, set to take effect on April 3, are aimed at expanding America’s auto manufacturing prowess. For decades, because of a free trade agreement, automakers have treated Canada, Mexico and the United States as one big country, with no tariffs among them. Although the United States is already home to a significant automobile making industry, Trump wants to grow it further.

     

    “Frankly, a friend has often been much worse than a foe. And what we’re going to be doing is a 25% tariff on all cars that are not made in the United States,” Trump told reporters before signing an executive proclamation in the Oval Office. “If they’re made in the United States, it’s absolutely no tariff.”

     

    On Wednesday, April 2, President Trump also unveiled an ambitious set of tariffs, including a 34% levy on imports from China and a 20% tax on goods from the European Union, signalling a dramatic intensification of global trade tensions.

     

    These sweeping measures also impact Ghana, which will face a 10% baseline import tax.

     

    Speaking from the Rose Garden, Trump declared a national economic emergency, justifying the tariffs as a means to revitalize domestic manufacturing and end what he referred to as decades of economic exploitation by foreign nations.

     

    “Our country has been looted, pillaged, raped, and plundered by other nations,” Trump stated. “Taxpayers have been ripped off for more than 50 years. But that will not happen anymore.”

     

    The newly imposed tariffs, introduced without Congressional approval under the 1977 International Emergency Powers Act, target numerous countries with significant trade surpluses with the U.S. Ghana, along with other affected nations, will be subjected to a 10% import tax across the board, adding pressure to global supply chains.

     

    China’s retaliatory tariffs have been met with another tariff hike on American goods from that country, which raises them to 125%, while Trump has paused the baseline tariffs imposed on other countries by 90 days. But, countries like Ghana which had 10% tariffs adjustment had taken effect.

     

  • Gov’t anchors on fiscal discipline to pursue IMF programme targets

     

    Dr. Forson leads gov’t push for fiscal discipline under IMF programme.

     

    Adnan Adams Mohammed

     

    The Government of Ghana has consistently declared its intent to rally around the fiscal discipline, integrity and goodwill of government officials to ensure its meeting the targets of the International Monetary Fund Extended Credit Facility programme.

     

    The President John Dramani Mahama administration inherited an ongoing IMF programme from the previous administration. The fourth review of the program just ended last week with the government securing a staff-level agreement pending the Board’s approval for the release of the fourth tranche of US$370 million of the financial bailout of US$3 billion in total.

     

    Despite the Fund’s dissatisfaction with the previous government’s failure to comply with the targets set in the last quarter of last year – although recording an improved balance of payment position and Gross Domestic Product growth – Ghana’s Finance Minister, Dr Cassiel Ato Forson has made  personal commitments to lead the charge to meet all targets under the IMF arrangement going forward, reinforcing the administration’s credibility with both domestic and international partners, while assuring that government’s efforts would continue to focus on inclusive growth, job creation, and protecting the poor and vulnerable.

     

    “We remain fully committed to the implementation of the programme and will do all it takes to ensure that its objectives remain on track”, Dr Cassiel Ato Forson said while speaking at a joint press conference held by the Ministry of Finance, Bank of Ghana and the IMF itself, at the end of the 4th review.

     

    “This is about building the Ghana We Want—together. We fully recognize the sacrifices made by every Ghanaian as we work together to restore macroeconomic stability and secure a brighter future for our nation.”

     

    To achieve these objectives, the Ministry of Finance has unveiled a series of ambitious structural reforms aimed at restoring fiscal discipline, increasing transparency, and reinforcing debt sustainability, as part of Ghana’s ongoing IMF-supported recovery programme.

     

    Dr. Ato Forson further outlined measures being taken to reverse prior breaches of structural and quantitative targets.

     

    “We have worked tirelessly to reverse the situation and, in some cases, fast-tracked the implementation of certain structural reforms ahead of schedule,” he assured

     

    Among the most significant reforms is the commissioning of the Auditor-General, supported by two international firms, to audit and validate the legitimacy of the 2024 arrears.

     

    The results, expected within eight weeks, will guide corrective action and promote accountability.

     

    Further reforms include amendments to the Public Financial Management Act and the Procurement Act to introduce fiscal rules and enhance control over public expenditure.

     

    A newly established Compliance Desk will monitor adherence across Ministries, Departments and Agencies, backed by a soon-to-be-published compliance league table.

     

    “These bold steps are not just technical fixes—they are about restoring trust in public financial management,” Dr. Forson added, emphasizing the importance of long-term credibility and sustainability in Ghana’s economic governance.

  • Ghana’s 1st listed Commercial Paper issuance opens door to new financing mode

    FEDCO lists Ghana’s first Commercial Paper on the Ghana Stock Exchange.

    By Toma Imirhe

    Last week the very first Commercial Paper to be listed on the Ghana Fixed Income Market was issued. The issuance was by Federated Commodities Ghana, one of the biggest licensed cocoa buying companies in the country, and is worth GHc72.5 million, the first part of a GHc200 million CP issuance programme approved by the Securities and Exchange Commission and the Ghana Stock Exchange under shelf registration, which will allow the company to issue a further GHc127.5 million in tranches over a stipulated time frame.

    The transaction was facilitated by First Atlantic Bank Ghana, First Atlantic Brokers, Deloitte Ghana, G.A. Sarpong & Co, Glico General, GCB Bank PLC, the Central Securities Depository (CSD), and Beacon Ratings.

    Ghana’s listed Commercial Paper (CP) programme was formally launched by the GSE in May last year, although it has taken close to a further one year for the first one to be listed. However it is by no means the first CP to be issued in Ghana’s money market – over the years unlisted CPs have served as a means by corporates for raising short term financing quickly without underpinning collateral nor the need for detailed loan documentation and covenants. But this has also dissuaded many portfolio investors from subscribing to CPs which they see as too risky, since investors lack comfort or recourse in the event of a payment default.

    This persuaded the GSE and SEC to design a formalized framework for the issuance of CPs in Ghana, which was launched nearly a year ago.  Under the framework a CP may be interest bearing or issued at a discount to face value as may bedetermined by the Issuer; shall only be redeemable at maturity and therefore cannot be discounted before the end of its tenor;and shall have an investment grade rating issued by a Credit Rating Agency.

    Fedco, the issuer of last week’s landmark CP is the 3rd largest LBC and now commands a 10.5% share while its activities affect 70,000 farmers and over 400,000 lives nationwide.

    The inability of COCOBOD to secure further versions of its annual international syndicated bank loan since the last cocoa crop season has forced LBC’s in Ghana to collaborate with the international buyers themselves to finance purchases from local farmers – Fedco claims that it and its international buyers between them now have a US$20 million (over GHc300 million)  purchases portfolio outstanding – and this in part explains its need for increased short term funding. Besides this the company is now expanding beyond cocoa into logistics, commodity trading, and food processing, with an 18,000-metric-ton rice mill in Kampung Dari and a food processing facility underway.

    Last week’s milestone issuance and the potentials it holds with regards to short term financing at lower than prevailing direct bank lending rates has brought new enthusiasm to Ghana’s debt-financing needy corporates at a time that the commercial banking industry is still struggling to shrug off the effect of government’s recently implemented Domestic Debt Exchange Programme on its balance sheet quality, cash flow and consequent willingness to lend.

    Speaking at the issuance event, Abena Amoah, Managing Director of the GSE, expressed her enthusiasm about the advent of listed CPs in Ghana “This first-of-its-kind issuance showcases the Commercial Paper Market’s potential to unlock new, flexible financing options for businesses. It’s encouraging to witness a corporate entity seize this opportunity, and we anticipate many more to follow.

    “This landmark issuance underscores the effectiveness of the Commercial Paper Market in providing businesses with alternative short-term financing opportunities. We are excited to see

    forward to more corporate issuances in the coming months.”

    Echoing this sentiment, FEDCO’s Managing Director, Maria Adamu-Zibo, reflected on the broader impact of the move: “Being the first to issue a Commercial Paper on the GFIM is not just a financial achievement—it’s a powerful endorsement of Ghana’s capital markets. It speaks to our confidence in the system and our ongoing commitment to the communities we serve.”

    Special Guest of Honour at the event, John Awuah, who is the CEO of the Ghana Association of Bankers,  highlighted the significance of the transaction as a foundational benchmark: “This initial issuance is a litmus test for the future. Ensuring timely repayment will be key to earning the trust and confidence of investors going forward.”

  • Gold traders given 14 days grace period to apply for new license under Goldbod regime

    Gold Board logo

     

     

     

    Read statement below:

     

    PRESS STATEMENT

    14TH APRIL, 2025

     

    1. The general public is respectfully  informed, that pursuant to the Ghana Gold Board Act (ACT 1140), 2025, passed by Parliament on 29th March, 2025 and assented to by the President of the Republic on 2nd April 2025, all licenses issued by the Precious Minerals Marketing Company (PMMC) and/or the Minister responsible for Mines to a person other than a large scale mining company to deal in gold, have ceased to be valid.

     

    2. The GoldBod is currently, the sole buyer, seller, assayer and exporter of all gold produced by the licensed Artisanal and Small-Scale Mining (ASM) sector.

     

    3. As such, no person other than the Ghana Gold Board (GoldBod), is permitted to export ASM gold from Ghana. Also, no person other than the GoldBod or a licensed buyer or aggregator or service provider of the GoldBod, is permitted to purchase or deal in gold in the country.

     

    4. However, to ensure a smooth transition and respect for existing contractual obligations between licensed gold buyers and their off-takers, the Ghana Gold Board has resolved to allow for gold purchases and exports by persons holding appropriate licenses issued to them by the PMMC and/or the Minister Responsible for Mines until 30th April, 2025.

     

    5. For the time being, all licensed persons or entities buying gold from the local market, must do so in Ghana cedis and at a price calculated based on the Bank of Ghana Reference Rate published on www.bog.gov.gh.

     

    6. Any Ghanaian or a fully-owned Ghanaian company whose license has ceased to be valid and/or any Ghanaian who is desirous of dealing in gold, is encouraged to apply for a license under the Ghana Gold Board Act (ACT 1140), 2025 effective, Tuesday, 22nd April, 2025.

     

    7. An application for a GoldBod license may be done online, via the website of the GoldBod (to be activated and published on the effective date for license applications, 22nd April, 2025) or physically at the GoldBod Licensing and Regulations office located at our head office in Accra.

     

    8. All foreigners are hereby notified to exit the local gold trading market not later than 30th April, 2025. A foreigner may however apply to the GoldBod to buy or off-take gold directly from the GoldBod.

     

    9. It is worthy of note, that it shall constitute a punishable offense for a person to purchase or deal in gold in the country without a license issued by the Ghana Gold Board, effective 1st May, 2025.

     

    Thank you.

     

    SIGNED.

    Prince Kwame Minkah

    (Media Relations Officer, GoldBod)

    Contact no: +233256203488 & +233545540001

     

  • The signs of a stable cedi/dollar exchange rate in 2025

     


    Ghana’s cedi shows signs of stability in 2025, driven by improved fiscal discipline, surging gold prices, and increased investor confidence.

     

     

    By Toma Imirhe & Elorm Desewu

    Considering that 2025 is another year during which Ghana will not have access to the international capital market it is only to be expected that both participants in the local economy and international direct investors would be nervous about the direction and quantum of the change in the exchange rate between the Ghanaian cedi and the United States dollar over the coming months.
    Indeed it would appear they have good reason to worry.

     

    The relative exchange stability enjoyed by the cedi during the latter years of the previous decade and the start of this one were primarily achieved by heavy borrowing of US dollars in the form of annual Eurobond issues of US$3 billion, most of which was used to prop up the supply of foreign exchange on the local currency market. However when the three international sovereign credit ratings agencies – Fitch, Moodys and Standard & Poors – all decided that Ghana’s public forex debt was unsustainable towards the end of 2022 and Bloomberg began justifying the resultant price discounts and consequent sharp rise in yields on Ghana-issued Eurobonds to investors still holding on to them, the real cost of this cavalier strategy became clear.

     

    Since then, the value of the cedi against the US dollar has fallen to barely a third of what it used to be, with a dollar trading for GHc5.56 by early April 2025 on the interbank forex market – and a significantly higher GHc6.10 on the retail market – compared with a little over GHc6 to a dollar as at the third quarter of 2022. Instructively the cedi’s free fall continued through to 2024, with the currency depreciating by 28% against the American greenback last year alone.

     

    But Ghana’s pivotal change of government from the erstwhile profligate Nana Akufo-Addo administration to the much more fiscally responsible incumbent President John Dramani Mahama administration, coupled with favourable developments in the country’s key international commodity export markets have changed the exchange rate trajectory sharply. While the cedi still depreciated sharply during the first quarter of 2025 while the Mahama administration was settling in – by 5.36% against the dollar – this was followed by marginal appreciation at the start of April which narrowed the year to date fall to less than 3%, and relative exchange rate stability since then.
    Speaking after the 123rd Monetary Policy Meeting in late March, Governor of the Bank of Ghana, Dr. Johnson Asiama, announced a set of measures aimed at stabilizing the Ghanaian cedi, as the currency faces continued pressure against major foreign currencies.
    These include tightening monetary policy to control inflation, enhancing foreign exchange reserves and structural reforms to address exchange rate misalignment.
    Dr. Asiama stresses the need for monetary and fiscal coordination, inflation control, and structural reforms to restore confidence in the cedi.

     

    “On top of the projected steady growth for 2025, the international markets have priced in a much stronger US economy stemming from the policies to be implemented by the new US administration. This has already instigated a stronger US dollar with implications for emerging markets and developing economies, including Ghana” he warns.
    “Complementary fiscal and monetary policies will therefore have to be carefully set to prevent spillovers to the Ghanaian economy.
    “External sector conditions remain positive, with sustained and stronger-than-programmed rebuilding of reserve buffers contributing to the stability of the domestic currency. The performance of the external sector (in 2024) was mainly driven by strong growth in gold exports, which also largely impacted positively on growth. In the outlook, the external sector is expected to remain strong as commodity prices remain favourable amid improvements in production.

     

    Overall, while the external sector conditions are expected to provide an anchor to exchange rate stability, key risks in the outlook including challenges in the energy sector will have to be closely monitored.”
    Importantly he is backing his words with concrete action. The Bank of Ghana supported the foreign exchange market with US$264.4 million in March 2025 alone to preserve the stability of the cedi.

     

    Indeed, such interventions reflect the growing size of Ghana’s gross international reserves and the consequent ability to both provide forex liquidity in the local market and directly intervene in it when deemed necessary.
    Easily the biggest contributor to this newfound strength is gold, which is continuously setting new international market price records by the week. The price of a fine ounce of gold is currently around US$3,227 and is rising so fast that even Goldman Sach’s earlier forecast of a closing price for the year of over US$3,500 now looks much too conservative.

     

    Apart from enjoying the direct benefits of the ongoing unprecedented price surge, it is also encouraging investment in increased production in Ghana and, more recently, concerted efforts by the new government to formalize small scale mining (most of which has been illegal and environmentally unfriendly) and take control of the sale of the gold it produces, much of which has been smuggled out in the past.

     

    Databank Research expects the new government to prioritize domestic mining, boosting gold production to bolster reserves. According to its Ghana Outlook report for 2025 “In the aftermath of the elections, the new government may focus on enhancing domestic mining companies to boost gold production.

     

    This comes at a time when gold reserves have been steadily increasing in recent years, standing at 37.52 metric tonnes as of the second quarter of 2024, with projections indicating a rise above the levels recorded in 2023. We believe the move will further augment gold reserves and offer a potential cushion for the Cedi.”

     

    Oil prices are falling too but this is a double edged sword, favouring consumers who might be able to enjoy price cuts at the pump on imported petroleum products, and lower diesel import costs for powering thermal electricity stations, but putting government’s forex revenue target from crude oil exports in jeopardy.

     

    Cocoa prices are still hovering not too far behind the over US$10,000 per ton they peaked at last year and Ghana’s production looks set to exceed its 617,000 target for the current crop season, but about a third of this is going into fulfilling supply contracts that the country defaulted on during the previous disastrous crop season.

     

    Commodity prices on international markets – and to a lesser extent, production – are outside the complete purview of government itself, but the Mahama administration is proving prudent in the fiscal management and economic policy measures that it can control and these are already yielding palpable results which are not going unnoticed both at home and abroad.
    Databank Research predicts that political stability after the 2024 elections is expected to attract foreign direct investment (FDI) and portfolio inflows, easing speculative pressures on the cedi. Disciplined fiscal policies are projected to reinforce this recovery.

     

    “We expect a successful 2024 election to bring renewed confidence in the Ghanaian economy which should lead to increased foreign direct investment and portfolio inflows. This development would bolster investment sentiments around the cedi and reduce speculative attacks on the currency,” Databank Research notes.

     

    Indeed, following Ghana’s Eurobond debt restructuring in 2024, Moody’s and Fitch upgraded the country’s ratings, with Moody’s moving its issuer rating from “Caa3” to “Caa2” and assigning a positive outlook.
    Databank also predicts further upgrades as economic indicators improve, strengthening the cedi.

     

    “Following the successful Eurobond debt rework in the 3rd quarter of 2024, global rating agencies Moody’s and Fitch upgraded Ghana’s long-term local and foreign currency issuer ratings. Moody’s upgraded the issuer rating from “Caa3” to “Caa2” and “Ca”, respectively, and assigned a positive outlook,” Databank notes.

     

    “Fitch Solutions followed with the upgrades, assigning a “CCC+” to Ghana’s new USD bonds from the initial “CCC”. We expect a further upgrade as the rating agencies cited that continuous improvement in economic indicators would attract higher upgrades. We expect these developments to improve sentiments around the Cedi and allow for its stability,” the research firm predicts.

     

    Inevitably quantitative forecasts for the cedi’s exchange rate performance against the US dollar vary from one forecasting firm to another, depending on the specific nature of their econometric modelling and trend analyses. But instructively none of the forecasts predict major depreciation during 2025.

     

    Coin Codex, an American economic and financial forecaster expects that in 2025, the exchange rate between the US dollar and the Ghanaian Cedi is anticipated to range between GHc 15.06 and GHc 16.91, leading to an average annualized price of GHc 15.90.

     

    World renown accounting and management consulting firm Deloitte predicts that in 2025, the improved investor confidence arising from the relatively peaceful election, the conclusion of the government’s debt restructuring negotiations, periodic International Monetary Fund (IMF) disbursements and higher gold export receipts will boost the international reserves level of the country and support the cedi’s value.

     

    Gov Capital Forecasts expects the US dollar to exchange at 15.70 by the end of the third quarter of this year.

     

    What all these forecasts have in common though is that the exchange rate will remain more or less stable through 2025 which means currency traders planning to take positions against the cedi – a major cause of cedi depreciation in the past – would be better off investing in government or Bank of Ghana bills which offer better returns on their investment.

  • Airtel-Tigo Debt: Gov’t negotiating haircut, cash payment reduced to US$10m


    “Minister Sam George reveals details of Airtel-Tigo’s US$400m debt restructuring during a press briefing in Accra.”

     

     

    Adnan Adams Mohammed

     

    Government of Ghana is negotiating with ATC over a mounting debt inherited for acquisition of Airtel-Tigo by the previous NPP administration for a ‘haircut’ arrangement.

     

    The debt, which stands at US$ 400 million has been reduced to US$ 200 million, but with a cash payment component of US$ 10 million which is to be paid over a period of time, the Minister for Communications, Digital Technology and Innovation, Samuel Nartey George has revealed.

     

    However, the company continues to face financial challenges, with monthly operating losses amounting to GH¢20 million as the Minister has criticized the previous government’s acquisition of Airtel Tigo, which was rebranded as AT, for a reported purchase price of US$1. He described the decision as “ill-informed and reckless,” highlighting that the company had a debt portfolio of US$400 million at the time of purchase and lacked sufficient revenue to cover its overhead costs.

     

    “The previous government acquired Airtel Tigo and rebranded it as AT with a reported purchase of US$1. Nothing could have been more disingenuous and unpatriotic. When the company was bought its debt portfolio stood at US$400million and its revenues could not meet its monthly overheads”, Sam George told journalists at a Meet-the-Press event in Accra, last week.

     

    “The core and dealing platforms have reached the end of life and neither Bharti, which operated Airtel, nor Milicom, which operated Tigo, had failed to make any meaningful investments in both companies over the preceding five years.

     

    “The decision to step in at the time can best be described as ill – informed and reckless. It was an abdication of responsibility by the then administration and minister to the best interest of Ghana.”

     

    “…Today after a debt restructuring arrangement, the debt portfolio at AT sits at about US$200million, rising every month as the company makes a monthly operating loss of GHc20million.

     

    “The bleeding needs to be stopped and urgent steps are underway to engage the company’s creditors in negotiating haircuts to ensure the company’s viability,” Sam George stated.

     

     

  • U.S Tariff War: African exporters react as AfCFTA gears up to subdue impact

     

    AfCFTA Secretary-General Wamkele Mene urges swift intra-African trade action as exporters respond to U.S. tariff hikes.

     

     

    Adnan Adams Mohammed

     

    African trade ministers are expected to meet through the African Continental Free Trade Area (AfCFTA) Secretariat to discuss the impact of the of the 10 percent tariff imposed on goods and services from Africa to the United States.

     

    The meeting, to be held on Monday, April 14, will explore how the African continent can best position itself in the face of growing global protectionism while leveraging on the AfCFTA as it brings together key policymakers, economists, trade experts, and representatives from regional economic communities.

     

    Addressing the media from Washington, D.C., Secretary-General of AfCFTA, Wamkele Mene, emphasised that the decision by U.S President, Donald Trump, underscores the urgent need for African nations to fast-track the implementation of policies that promote intra-African trade and reduce overreliance on global powers.

     

    “The U.S. tariff is a wake-up call for Africa”, Wamkele Mene said. “And the wake-up call is that we must accelerate our own economic self-sufficiency. The ministers of trade will meet on April 14 to deliberate on this matter and exactly how our continent should respond.”

    President Trump has paused the implementation of his tariff hikes for imports from most countries for 90 days, but it is unclear whether this is part of a rethink by the US government, or simply a ploy to give affected countries an opportunity to negotiate reciprocal tariff cuts with the world’s biggest market.

     

    Meanwhile, the Vegetable Producers and Exporters Association of Ghana has called on the AfCFTA Secretariat to remain committed to eliminating trade barriers that hinder intra-African trade among member countries.

     

    It highlighted infrastructural and logistical challenges as inadequate, discouraging exporters from exploring other African countries as viable markets.

     

    “Some of these barriers are serious hindrances to traders and drivers”, President of the Association, Dr. Felix Mawuli Kamassah, said while reacting to the U.S tariffs adjustment. “If you speak to people engaged in regional trade, especially within ECOWAS and the broader West African region, they’ll tell you about the numerous challenges they face.”

     

    He cited the example of onion traders transporting goods from Niger, who often encounter multiple obstacles during transit, adding: “It shouldn’t be like that. We want to promote trade among ourselves. Why can’t we make better decisions and identify key areas to improve?”

     

    “Our sector, like yam exporters, is going to be hit hard. Some buyers require freight to be prepaid before receiving goods, so this extra 10% cost will reduce our export volumes,” he explained. “I’m happy the Ministry of Trade and the Ministry of Foreign Affairs have already met with the U.S. Ambassador.  We’re meeting with the Ministry of Trade to discuss the challenges and explore ways to push for further reductions or even zero rate.”

     

    Dr. Kamassah emphasized that exporters are not asking for financial handouts from governments or regional bodies, but rather the creation of a conducive environment to support intra-African trade.

     

    Dr Kamassah called on the AfCFTA Secretariat to take a more proactive role in resolving these long-standing issues.

     

    Additionally, the Ghana Union of Traders Association (GUTA), and the Food and Beverages Association of Ghana (FABAG) have also raised concerns about the adverse impact the tariff could have on their respective industries, and are therefore, calling on the U.S. government to reduce or eliminate the newly imposed 10% tariff on Ghanaian exports.

     

    Dr. Joseph Obeng, President of GUTA, echoed similar sentiments, emphasizing the need for a broader review of the African Growth and Opportunity Act (AGOA), which grants duty-free access to several U.S. markets for African countries.

     

    “The price hikes will affect trade flow. That’s why we want the government to push for the tariff to be removed altogether,” Dr. Obeng stated. “We’re also appealing for an extension of AGOA so we can build capacity and better assess the U.S. market. It’s a state policy embedded in their constitution, so we can use that as leverage.”

    However AGOA in its current form expires in September and few expect the Trump administration to renew it.

     

    John Awuni, Executive Chairman of FABAG, also backed the calls, warning that the tariff acts as a trade barrier that could shift Ghanaian exporters to more favorable markets.

     

    “Tariffs are essentially trade barriers,” Awuni said. “When tariffs rise, demand drops. Exporters will naturally start seeking more friendly markets.”

     

    The new tariff threatens to increase the cost of African exports to the U.S., potentially diminishing their competitiveness in the American market.

     

    Many African economies rely on exports such as textiles, agricultural produce, raw materials, and manufactured goods, much of which are currently traded under preferential access agreements such as the African Growth and Opportunity Act (AGOA).

     

     

     

  • BoG cautions commercial banks as they adjust lending rates

     

     

    Dr. Johnson Asiama engages banking CEOs, urging caution and transparency as lending rates adjust to new monetary policy changes.

     

     

    Adnan Adams Mohammed

     

    Commercial banks operating in the country are being cautioned by the Bank of Ghana to be transparent and reasonable in adjusting their lending rates upwards in line with the monetary policy rate upward adjustment by 100 basis points a fortnight ago.

     

    At the most recent Monetary Policy Committee meeting held in the last week of March, the policy rate was increased to 28 percent from the previous 27% with three Committee members voting in favour of the hike while two members voted in favour of retaining the previous rate.

     

    The MPR hike provides guidance for commercial banks and other lenders to adjust their rates if they wish to do so. However, the central bank wants lenders to be mindful of the impact of their rate increase on both businesses and households.

     

    “While the policy tightening will affect funding costs and credit pricing in the near term, the financial system is well-positioned to absorb these effects”, Governor of the Bank of Ghana, Dr. Johnson Asiama, speaking at the maiden post-MPC meeting with CEOs of commercial banks in Accra last week, noted.

     

    “We therefore urge banks to exercise prudence in adjusting lending rates and maintain transparent communication with clients.”

     

    Recognizing the significant impact the adjust in lending rate could have on businesses and households, the central bank has urged the commercial banks to support struggling sectors with targeted financial support.

     

    “The policy rate increase also strengthens external buffers, supports the cedi, and signals our commitment to macroeconomic stability at a time of heightened global uncertainty. However, we also recognize that the policy rate hike will affect borrowing costs for businesses and households. Viable businesses should continue to receive support, and tailored solutions should be explored to mitigate the impact on the most vulnerable sectors,” the Governor added.

     

    The hike in the policy rate by 100 basis points is the first adjustment since September 2024.

     

    Meanwhile, Dr. Asiama has explained that the decision was “aimed at reinforcing the disinflation process, which, while underway, remains too gradual to secure lasting stability. The decline in headline inflation from 23.8 percent in December to 22.4 percent in March confirms that recent policy actions are having the intended effect. However, inflation expectations remain elevated, and core inflation is still above the medium-term target.”

     

    Despite recent challenges, the Governor also expressed cautious optimism about the state of the banking sector. He noted that, even in the absence of relief measures, the sector has shown sustained improvement, driven by gains in solvency, asset quality, liquidity, and profitability.

     

    Consequently, Dr. Asiama highlighted ongoing concerns regarding solvency issues in a few domestically controlled and state-owned banks, where recapitalization efforts remain unclear.

     

    “Addressing these capital shortfalls remains a top priority,” he stated. “We are working closely with the affected institutions to achieve sustainable capital levels, restore depositor confidence, and ensure full compliance with regulatory requirements.”

     

    Dr. Johnson Asiama, also announced plans to enhance the central bank’s supervisory and crisis resolution tools.

     

    Central to this initiative is the upcoming launch of a Resolvability Assessment Framework, designed to ensure that banks remain well-capitalized and are adequately prepared for distress scenarios—particularly in an increasingly interconnected financial landscape.

     

    This framework, he noted, draws on lessons from past bank resolutions and forms part of a broader strategy to bolster crisis preparedness.

     

    “To build true resilience, we must move decisively beyond traditional, reactive supervision toward a more forward-looking, risk-sensitive, and system-aware model,” the Governor stated.

     

    Dr. Asiama also reaffirmed the Bank’s commitment to supporting the sector through effective policy, open dialogue, and collaboration, aiming to build a more inclusive and stable financial ecosystem that meets the needs of all Ghanaians.

     

     

     

     

     

     

     

     

     

  • Govt snubs high treasury bill rate demands ​ …despite heavy debt refinancing needs

    Government limits treasury bill uptake, prioritizing lower interest rates despite mounting refinancing demands.

    By Toma Imirhe

    Last week, Government faced the second major test of its recently introduced strategy of refusing tenders from investors for its treasury bills which exceed its target range of interest rates it is willing to pay them for their subscriptions. At last week’s treasury bill auction investors only tendered GHc4,057.48 million, well below government’s declared target of GHc6,678.00 million, this being their response to government for having used its severely dampened demand for treasury securities financing to force interest rates payable of them down to between 15.4527% for 91 day bills, and 18.6507% for 364 day bills; while 182 day treasury bills attracted an interest rate of 16.2149%  at last week’s auction.

    However government stuck to its guns of rejecting bids for subscriptions at interest rates above its liking, accepting only the lowest bids, these amounting to just GHc1,692.24 million. This strategy and outcome mirrors the previous couple of treasury bid auctions – in the previous week it accepted just GHc1.69 billion out of a targeted GHc4.39 billion.

    But what is surprising portfolio investors is that for two consecutive weeks, government has refused to secure enough new treasury bill financing to refinance maturing bills. A fortnight ago, its uptake was barely 40% of the GHc4.22 billion in maturing bills it had to contend with, and last week its uptake fell to 26% of the GHc6.43 billion it required to refinance maturing bills.

    This means that government is openly calling the bluff of investors who are gradually pulling back from buying treasury bills that offer interest rates that are between 450 and 700 basis points below year on year consumer price inflation.

    Investors are rather opting to buy up 56 day Bank of Ghana bills, which offer interest rates of nearly 28%, up marginally since the beginning of April after the central bank increased its benchmark Monetary Policy Rate by 100 basis points to reach 28% in late March. Last week alone the BoG sold GHc3.962 billion worth of its bills on Monday and a further GHc2.281 billion on Wednesday.

    Financial analysts believe government is therefore taking money from the central bank to refinance its maturing treasury bill obligations, this giving it space to force treasury bill rates – and its consequent domestic debt servicing costs – downward much faster than inflation can fall.

    The law requires that government cannot take more than 5%, net, of its previous year’s tax revenues from the BoG but since the computations are only done at year’s end it can afford to exceed that limit during the year as long as it falls back within the limit before December 31 by repaying the appropriate excess back to the central bank.

    Meanwhile the BoG’s issuance of its own bills are a key tool in combating inflation through the withdrawal of excess liquidity from the economy and so this strategy (if indeed is what is being applied) suits both the central bank and government itself without breaking any laws and curbs, rather than stokes inflation.

    As inflation drops to near or below the treasury bill interest rates government is willing to pay, portfolio investors will come flooding back to that market while the BoG will have less reason to keep issuing large amounts of BoG bills to soak up inflationary liquidity.