Ghana’s ministerial reshuffle raises concern for global investors: summary
What we know
- Ghana’s President, Nana Addo Danquah Akufo-Addo, has announced a reshuffle of his government. The highlight of the reshuffle is the replacement of the Finance Minister, Ken Ofori Atta, who has since 2023 overseen the country’s investment negotiations and debt restructuring.
- Global investors are sceptical and concerned about potential delays in the country's overseas debt restructuring ahead of the December national elections.
- Reuters reports that the appointment of Mohammed Amin Adam, the minister of state in the finance ministry, as the replacement for Ken Ofori-Atta, was not anticipated to entirely derail negotiations on the debt restructuring.
- However, the uncertainty surrounding the change led to a decline in the prices of Ghana's Eurobonds.
- Ghana is actively pursuing relief for approximately $13 billion owed to private creditors who hold eurobonds. The country defaulted on a significant portion of its external debt in December 2022. The default was attributed to increasing debt servicing costs and rising inflation.
What they said
Portfolio manager for emerging markets hard currency debt strategy at asset manager Ninety-One, Thys Louw, said, "There could be some risk regarding a delay as the (new) minister of finance catches up. But overall, this is unlikely to derail a deal before the elections. The broad parameters of what is required to get a deal are well understood by both sides and unlikely to be altered by a new minister of finance." Further, emerging markets debt portfolio manager at Vanguard, Nick Eisinger said, “We know that the government had received very mixed feedback from investors when they revealed the initial parameters of the restructuring back in October/November and that more work is needed.” "We interpret this (change) as a signal that fiscal consolidation slippages to salvage the ruling party's flailing electoral campaign are now more certain," said Bright Simons, IMANI Africa vice president.
