News Guide Africa

Tag: Middle East conflict

  • Strong reserves amid cedi recovery reassure investors …as BoG reinforces market stability

    Strong reserves amid cedi recovery reassure investors …as BoG reinforces market stability

    By Adnan Adams Mohammed 

     

    The Ghanaian business community and international investors are eyeing renewed stability in Ghana’s financial markets.

    This follows as the Bank of Ghana (BoG) highlights a robust US$12.9 billion foreign exchange reserve buffer, designed to shield business operations from external currency volatility and anchor long-term economic predictability.

    Speaking at a stakeholder engagement with the Sunyani business community, Bank of Ghana Governor Dr. Johnson Pandit Asiama assured investors that the country’s external position remains resilient, backed by five months of import cover and strong trade surpluses.

    “Our external sector has also remained resilient. Exports of gold and cocoa have performed strongly, helping Ghana record a higher trade surplus during the first half of the year,” Dr. Asiama told attendees. “Although higher global oil prices have increased our import bill, Ghana continues to maintain strong foreign exchange reserves of about US$12.9 billion, enough to cover five months of imports.”

    The Governor emphasized that maintaining a substantial reserve balance serves as a crucial anchor for investor confidence, equipping the central bank with the necessary leverage to intervene and maintain order in the domestic foreign exchange market during volatile periods.

    “These reserves give us a strong buffer against external shocks and help the Bank of Ghana support stability in the foreign exchange market,” he added.

    Touching on currency performance, Dr. Asiama acknowledged that the Ghanaian cedi faced noticeable depreciation pressures earlier in the year as geopolitical instability, most notably escalating conflicts in the Middle East, disrupted global market dynamics. However, he reassured business leaders and investors that the cedi has since rebounded and stabilized.

    “The cedi experienced some pressure earlier this year because of global developments, particularly the conflict in the Middle East, but it has since recovered,” Dr. Asiama explained. “We remain committed to maintaining an orderly and well-functioning foreign exchange market.”

    Concluding his address, the BoG chief reiterated that the central bank will maintain proactive monetary policies to protect the cedi’s value, preserve macroeconomic stability, and foster a business-friendly environment conducive to long-term investment and economic growth.

     

  • Monetary stability and strong Q1 growth affirm robust outlook for business investment

    Monetary stability and strong Q1 growth affirm robust outlook for business investment

    By Adnan Adams Mohammed

     

    International and domestic investors are eyeing renewed opportunities in Ghana following the Bank of Ghana’s decision to hold its benchmark policy rate at 14 percent, backing a sharp 6.4 percent expansion in first-quarter economic output.

    Speaking to business leaders and financial stakeholders in Sunyani, Governor Dr. Johnson Pandit Asiama framed the monetary stance as a dual commitment: preserving macroeconomic predictability while creating an attractive, liquid environment for long-term private capital.

    The central bank’s decision comes against a backdrop of steady macroeconomic recovery, even as external risks, including persistent geopolitical tensions in the Middle East and fluctuating crude oil prices, continue to weigh on global financial markets.

    By anchoring the policy rate at 14%, the central bank aims to provide commercial institutions and private enterprise with predictable borrowing conditions, giving lenders room to trim interest margins without rekindling demand-pull inflation.

     

    Capitalizing on Strong Real-Sector Growth

    The economic footprint in the first quarter of 2026 presents a compelling case for commercial investment. Ghana’s GDP growth accelerated to 6.4%, up from 6.2% in the same period last year, lifted by broad gains in industrial production, services, trade, and a rebounding tourism sector.

    “I am also pleased to report that Ghana’s economy continues to grow. In the first three months of this year, the economy grew by 6.4%, compared with 6.2% during the same period last year,” Dr. Asiama announced, pointing to strengthening consumer and corporate confidence.

    For investors, the central bank’s decision to maintain the policy rate at 14% offers a stable baseline to price risk and deploy capital without the threat of sudden monetary tightening.

    “After carefully assessing our economic situation, the Committee decided to maintain the Monetary Policy Rate at 14.0%,” Dr. Asiama explained. “We took this decision because we believe it is the right balance. It will help keep inflation under control while supporting businesses, investment, and economic growth. At the same time, it gives us the flexibility to respond to changes in the global economy if necessary.”

    Private Credit Expansion Drives Market Opportunities

    A key indicator of investor activity is the dramatic growth in private sector credit, which surged 41 percent year-on-year. Lower borrowing costs and improved liquidity across commercial banks have unblocked credit channels, enabling companies to finance capital expenditure and market expansion.

    Dr. Asiama reassured institutional stakeholders that the financial sector is well-capitalized, resilient, and equipped to absorb external headwinds such as global oil price volatility and Middle East tensions.

    By keeping price stability intact while supporting a 41 percent boom in private credit, the central bank is positioning Ghana as an increasingly stable, high-yield destination for both direct and portfolio investments across West Africa.

     

  • Policy Rate held at 14% … amid rising global energy pressures and robust domestic growth

    Policy Rate held at 14% … amid rising global energy pressures and robust domestic growth

    By Adnan Adams Mohammed 

     

    The Monetary Policy Committee (MPC) of the Bank of Ghana has unanimously voted to maintain the Monetary Policy Rate at 14.0%, citing the need to safeguard price stability while navigating heightened global uncertainty caused by renewed geopolitical conflicts in the Middle East.

    The decision was announced following the committee’s 131st regular meeting, held from July 20 to 22, 2026, where members reviewed global and domestic macroeconomic developments and evaluated risks to the country’s inflation and growth outlook.

    Addressing journalists during the policy announcement, the central bank highlighted that renewed conflict in the Middle East has reignited volatility across global energy markets, leading to supply chain disruptions and a rebound in crude oil prices above $85 per barrel.

    “The easing of geopolitical tensions around mid-June proved short-lived. The renewed escalation of the conflict has led to another closure of the Strait of Hormuz and triggered instability in energy markets,” the MPC statement revealed. “Disinflation trends in several countries have stalled as energy prices have risen sharply, prompting many central banks to pause their monetary policy easing cycles in response to emerging inflationary risks.”

     

    Despite these headwinds, global economic activity has shown resilience, supported by substantial investments in artificial intelligence within the United States and China, leading the International Monetary Fund (IMF) to project global growth at 3.0% for July 2026.

    Strong Real Sector Growth and Credit Expansion

    On the domestic front, the central bank painted a picture of robust economic momentum, driven by strong growth in the services and industry sectors. Real GDP expanded by 6.4% in the first quarter of 2026, up from 6.2% recorded in the corresponding quarter of 2025.

    Furthermore, the Bank’s Composite Index of Economic Activity (CIEA) recorded a year-on-year growth of 13.4% in May 2026, compared to 4.4% in May 2025. This expansion was further bolstered by significant easing in credit conditions across the banking sector. The benchmark 91-day Treasury bill yield dropped to 5.3% in June 2026 from 14.7% a year earlier, while average commercial bank lending rates fell to 15.6% from 27.0%.

    In response to cheaper borrowing costs, private sector credit growth expanded sharply by 41.2% year-on-year in June 2026 (34.1% in real terms), compared to 8.6% recorded in June 2025.

    “The latest confidence surveys conducted in June 2026 showed positive consumer and business sentiments, supported by optimism about growth prospects, subdued inflation, and declining lending rates,” the committee noted.

     

    Inflation Uptick Driven by Base Effects and Transport Costs

    Headline inflation saw a moderate uptick, rising to 5.3% in June 2026 from 3.7% in May 2026, driven by higher food (3.9%) and non-food (6.3%) prices following temporary hikes in transport fares and base effects. However, the MPC emphasized that inflation remains well below the lower bound of the central bank’s medium-term target band (8\% \pm 2\%).

    “The July forecast remains broadly unchanged from the previous MPC round, with headline inflation projected to rise gradually into the target band,” the MPC stated. “Potential upward adjustment in utility tariffs, together with escalating geopolitical tensions in the Middle East and the associated increase in crude oil prices, present upside risks to the inflation outlook.”

     

    Robust External Sector and Banking Solvency

    Ghana’s external position remained firm, supported by high export earnings from cocoa and gold. The trade surplus widened significantly to $8.8 billion in the first half of 2026, up from $5.8 billion in the same period in 2025, while the current account surplus rose to $5.1 billion.

    Gross International Reserves stood at $12.9 billion at the end of June 2026 equivalent to 5.0 months of import cover providing an adequate buffer against external shocks despite higher energy import costs. On the currency market, the Ghana Cedi experienced a year-to-date depreciation of 9.5% against the US dollar as of July 17, 2026, after facing demand pressures in May.

    The banking sector also demonstrated strength, with total industry assets expanding by 30.7% to GH¢502.4 billion, while the Capital Adequacy Ratio (CAR) doubled to 20.4% from 10.6% in June 2025. Non-performing loans (NPLs) improved, declining to 16.1% from 23.1% over the same period.

    Unanimous Stance to Hold Rate

    In concluding its deliberations, the committee determined that maintaining the policy rate at 14.0% balances the need to anchor inflation expectations while supporting ongoing recovery in the real sector.

    “Given these considerations, the committee, by a unanimous decision, maintained the monetary policy rate at 14.0%,” the central bank announced. “The committee judged that the current policy stance remains appropriate to guide inflation into the medium-term target band while allowing time to assess the evolving geopolitical developments and their potential impact on the domestic economy.”

     

    The next regular meeting of the Monetary Policy Committee is scheduled for September 22 to 24, 2026, where the central bank will re-evaluate its stance based on new economic data.

     

  • Relief at the Pumps: Fuel prices see sharpest drop in months …as easing global conflicts open policy space for Central Bank

    Relief at the Pumps: Fuel prices see sharpest drop in months …as easing global conflicts open policy space for Central Bank

    By Adnan Adams Mohammed 

     

    In a major development for consumers and macroeconomic planners alike, retail fuel prices across Ghana are undergoing their sharpest decline in months.

    The localized drop follows a major de-escalation of international geopolitical conflicts, providing immediate breathing room for household budgets and strengthening the state’s path toward financial stabilization.

    Leading Oil Marketing Companies (OMCs) have aggressively cut pump prices, with petrol falling to GH¢13.87 per litre at major retail stations.

    The downward pricing shift is tied to a plunge in global crude oil benchmarks, which dropped below US$80 a barrel following diplomatic breakthroughs and an unexpected stabilization of tensions between the United States and Iran.

    Global De-escalation Drives the Plunge

    The abrupt reversal of global oil risks has injected fresh optimism into the domestic downstream petroleum sector. Over the past year, international shipping routes and crude production had been severely choked by ongoing conflicts involving major world powers and Middle Eastern nations, artificially inflating freight, logistics, and insurance premium overheads.

    Dr. Riverson Oppong, the Chief Executive Officer of the Chamber of Oil Marketing Companies (COMAC), voiced strong optimism that this international stabilization will provide sustained, long-term relief to Ghanaian consumers.

    “We are highly optimistic that stabilizing Iran-US tensions and a potential formal agreement could firmly push and sustain crude oil prices below the US$80 mark,” Dr. Oppong stated following a market review. “The localized drop starting this pricing window is a direct reflection of structural ease on the global market. If these international diplomatic gains hold, Ghanaian consumers will continue to enjoy consecutive rounds of relief at the pumps.”

    The Hidden Cost of War

    Despite the celebration surrounding the current price cuts, energy industry advocates note that domestic fuel prices remain heavily burdened by external geopolitical realities.

    Offering a sobering analysis of the structural mechanics behind fuel pricing, Dr. Patrick Ofori, the Chief Executive Officer of the Chamber of Bulk Oil Distributors (CBOD), revealed that without the compounding costs of global conflicts, fuel prices in Ghana would be exponentially lower than current retail figures.

    “If there was no war, and looking at where the Bank of Ghana auction rate stands today, Ghanaians would be buying these petroleum products at around GH¢9 or GH¢10 per litre at the very most,” Dr. Ofori explained. “The geopolitical disruptions over the last year pushed freight rates up five-fold and forced maritime insurance premiums to jump from $3 million to as high as US$17 million for single vessels. While we are happy with the current reduction to GH¢13.87, the reality is that local consumers are still paying an unearned premium due to international instability.”

    Dr. Ofori added that Ghana’s continued exposure to these global market shocks underscores the urgent need for the state to establish long-term funding mechanisms to build a resilient strategic petroleum reserve.

    A Major Victory for the Central Bank’s Disinflation Goal

    Beyond immediate relief for drivers and commercial transport operators, the plummeting cost of fuel serves as a major strategic victory for national monetary policy. High fuel prices have historically served as a rapid pass-through catalyst for food and core inflation across the country.

    Addressing financial stakeholders on the changing economic landscape, the Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, indicated that the easing of Middle East geopolitical risks has arrived at a critical juncture, fundamentally shifting the central bank’s policy horizons.

    “Lower global oil risks may significantly strengthen Ghana’s ongoing disinflation path,” Governor Asiama noted. “The cooling of energy supply shocks improves our baseline inflation outlook and, if these trends are structurally sustained over the coming quarters, it will create vital policy space for the monetary authorities to consider further policy rate easing.”

    With the central bank hinting at a potential lowering of commercial borrowing costs and OMCs signaling room for further pump reductions, the country’s broader business community is expressing rare optimism. If the global energy corridor remains free of active conflicts, the current retail price correction could mark the beginning of a sustained economic turnaround for the country.

     

  • Falling global oil risks open critical policy space for Central Bank’s disinflation agenda – Dr Asiama

    Falling global oil risks open critical policy space for Central Bank’s disinflation agenda – Dr Asiama

    By Adnan Adams Mohammed

    The Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, has indicated that the recent de-escalation of geopolitical risks in the Middle East could significantly strengthen Ghana’s domestic disinflation path, potentially clearing the way for a more accommodative monetary policy stance.

     

    Speaking directly to heads of commercial banks in Accra, Dr. Asiama revealed that a pending diplomatic framework agreement between Iran and the United States has fundamentally altered the central bank’s short-term macroeconomic projections.

    The international de-escalation has significantly reduced risk premiums embedded in energy markets, opening up a vital window of opportunity for the central bank to lock in structural price stability.

    Altering the Inflation Outlook

    The central bank’s optimistic assessment follows a period of acute anxiety within the Monetary Policy Committee (MPC). At its last statutory sitting, where the policy rate was held steady at 14 percent, the committee had flagged prolonged external supply chain disruptions as a primary threat to consumer price stability, despite the relative resilience of domestic output.

    However, the unexpected cooling of international shipping bottlenecks particularly surrounding the vital Strait of Hormuz has altered the risk matrix.

    “When the Committee last met, it assessed the domestic economy as resilient despite a complex and volatile global environment,” Governor Asiama stated during the high-level meeting. “The Committee noted that although inflationary pressures remained contained, potential risks persisted, especially those associated with prolonged geopolitical tensions. Clearly, the outlook since yesterday has now changed, and we are monitoring events in the coming days and weeks until the next meeting of the MPC.”

     

    Easing the Imported Inflation Pass-Through

    For an economy heavily reliant on imported refined petroleum, the global oil correction has immediate, far-reaching benefits for the central bank’s inflation-targeting framework. High fuel prices have historically acted as a rapid pass-through catalyst into the domestic economy, driving up transport fares, manufacturing overheads, and food distribution costs.

    Central bank analysts note that sustained crude prices below the $80 a barrel mark will help choke off this imported inflation at the source. By lowering the cost of energy inputs, the cooling external environment provides a direct tailwind to the ongoing disinflation process, making it significantly easier for the BoG to anchor long-term inflation expectations.

    Moreover, the central bank’s ability to maximize these global gains is reinforced by its aggressive reserve-building strategy. Having built a dense international reserve cushion, the BoG is well-positioned to maintain exchange rate stability. When a stabilizing cedi is paired with falling international commodity prices, the combined effect drastically reduces the cost of imported goods, accelerating the drop in headline inflation.

    Creating Policy Space for Rate Cuts

    The primary structural benefit of this disinflation momentum is the financial flexibility it grants to monetary authorities. If current trends hold and consumer price metrics continue to drop, the central bank will have the necessary justification to ease its tight monetary stance, potentially lowering the 14 percent policy rate during upcoming MPC cycles.

    A reduction in the central bank’s benchmark rate would trigger a corresponding drop in commercial banking lending rates, which have historically stunted private sector growth. Business associations have long argued that high borrowing costs restrict industrial expansion and squeeze corporate liquidity.

    While Governor Asiama stopped short of signaling an immediate, definitive policy pivot, his remarks strongly suggest that the changing external risk profile has laid the groundwork for a more supportive economic environment. If global energy lines remain free of conflict, the central bank’s disinflation agenda could soon transition from a defensive inflation-containment strategy into an active catalyst for cheaper commercial credit and nationwide business growth.

     

  • Standard Bank Research projects resilient 6.1% growth for Ghana amid geopolitical headwinds

    Standard Bank Research projects resilient 6.1% growth for Ghana amid geopolitical headwinds

    By Adnan Adams Mohammed

     

    Ghana’s macro-economic recovery is poised to maintain solid momentum, with the economy projected to expand between 5.9% and 6.1% in 2026, according to the latest market insights from Standard Bank Research.

    The optimistic growth forecast comes at a crucial time when emerging markets are navigating complex global pressures, particularly heightened geopolitical tensions and supply chain disruptions rooted in the Middle East conflict. Despite these severe external challenges, the research underlines Ghana’s strong foundational resilience, buoyed by robust performances in key domestic sectors.

    According to investment analysts, the West African gold, cocoa, and oil-producing nation is successfully charting its way out of its most severe economic crisis in decades, showing greater price stability and structural fortitude.

    “Ghana’s economic fundamentals are proving remarkably resilient against external shocks,” noted a lead macro-strategist at Standard Bank. “While escalating tensions in the Middle East pose undeniable risks to global energy costs and trade routes, Ghana’s diversified resource base particularly a booming gold sector and strategic fiscal consolidation provides an essential buffer that will keep growth firmly on track.”

     

    Driving Force: Services and Industry

    The Standard Bank projection aligns with recent data from the Ghana Statistical Service (GSS), which reported that the nation’s economy expanded by an impressive 6.4% in the first quarter of 2026, surpassing previous cycles. The expansion continues to be heavily propelled by the dynamic services sector alongside crucial gains in industrial and manufacturing activities.

    Government authorities have expressed confidence that the projected 5.9% to 6.1% growth window for the full year is highly achievable if current fiscal discipline is maintained.

    “The latest numbers reveal an economy that is expanding continuously while capturing much-needed price stability,” remarked Dr. Alhassan Iddrisu, Government Statistician. “The services and industrial sectors are consistently anchoring this expansion, ensuring that our macroeconomic recovery translates into broader industrial output, even as we monitor external variables closely.”

    Navigating Downside Risks

    Despite the glowing growth outlook, local industry players and financial experts urge a cautious approach. Elevated global oil prices caused by overseas instability have the potential to filter into domestic inflation, posing a direct threat to corporate operational budgets and consumer purchasing power.

    For many local enterprises, the challenge lies in bridging the gap between positive high-level statistics and the reality of high commercial lending rates on the ground.

    “We cannot ignore the downside risks highlighted by global financial developments,” warned a representative from the Association of Ghana Industries (AGI). “A 6% growth environment is excellent news for attracting foreign direct investment, but domestic policymakers must ensure we cushion local industries against expensive utility costs and import-dependent price spikes triggered by global conflicts. True stability will be defined by how well we shield our local supply chains.”

     

    With the central bank aggressively deploying its inflation-targeting framework to anchor market expectations, Standard Bank’s report highlights that Ghana is entering the latter half of 2026 as one of the standout economic performers in the Sub-Saharan region.