The Bank of Ghana expresses confidence in the recovery of Ghana’s economy, citing positive momentum and a 14-month low inflation rate, according to First Deputy Governor Dr. Maxwell Opoku-Afari. In an interview with ‘The Banker,’ he highlights the successful completion of domestic debt restructuring, paving the way for increased credit provision by commercial banks to the private sector.
Ghana’s Domestic Debt Exchange Programme, concluded in February 2023 with an 85% participation rate among eligible bondholders, contributed to stabilizing the economic landscape. The program, reopening in September 2023 for an additional ¢12.9 billion ($1.1 billion) in local bonds, reflects a concerted effort to strengthen the country’s financial foundation.
In May 2023, the International Monetary Fund (IMF) announced a $3 billion Extended Credit Facility arrangement, further supporting Ghana’s economic revival efforts with a focus on encouraging private investment and growth.
Dr. Opoku-Afari acknowledges the impact of debt restructuring on capital flow to the private sector but observes signs of recovery in banks’ balance sheets. With domestic debt restructuring largely concluded and expectations for the external debt restructuring to follow suit, he anticipates an increase in credit levels to the private sector.
“We, as a central bank, are very optimistic that once we are able to solidify and consolidate these [economic recovery] gains, the banks will begin to increase their credit into the private sector,” asserts Dr. Opoku-Afari.
Highlighting the strides made in containing the crisis, he notes a significant reduction in inflation, dropping from 54% at the start of the year to 35% in November 2023. Dr. Opoku-Afari emphasizes the need to consolidate gains and prepare for the future.
The recent Monetary Policy Report from the Bank of Ghana supports the positive outlook, citing ongoing recovery in domestic economic activity and anticipating a positive turn in the Composite Index of Economic Activity (CIEA) by year-end.
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