Latest news with #CassielAtoForson
Reuters
02-07-2025
- Business
- Reuters
Ghana consumer inflation slows to lowest level since 2021
ACCRA, July 2 (Reuters) - Ghana's consumer inflation (GHCPIY=ECI), opens new tab slowed for the sixth month in a row in June to 13.7% year-on-year, its lowest level since December 2021, the statistics service said on Wednesday. Government statistician Alhassan Iddrisu told a news conference that the underlying causes of inflation were cooling, and the downward shift over the last six months showed a sustained slowdown in prices. "The disinflation process we are observing means some breathing room for households, a more predictable environment for businesses, and for policymakers, a powerful signal that recent fiscal and monetary efforts may be taking hold," he said. He urged policymakers to stay the course. Food inflation dropped to 16.3% from 22.8% in May. "Given how heavily food prices weigh on the average Ghanaian in terms of households' budget, this single trend can have a meaningful impact on people's lived experiences," Iddrisu said. Ghana's central bank held its main interest rate (GHCBIR=ECI), opens new tab at 28.00% in May. The bank expected to announce its next monetary policy decision later this month. The gold- and cocoa-producing West African nation is emerging from its most severe economic crisis in a generation. Finance Minister Cassiel Ato Forson said in his March budget speech that sharp spending cuts would help bring inflation down to 11.9% by year-end.
Business Insider
30-06-2025
- Business
- Business Insider
World Bank approves $360m for Ghana's economic recovery
The World Bank has approved $360 million in financial support to help Ghana stabilise its economy, create jobs, and enhance resilience in critical sectors such as energy, finance, and climate adaptation. The World Bank approved $360 million in support for Ghana's economic stabilization and sector improvements. Ghana's Finance Minister acknowledged it as a key step towards sustained economic growth and resilience. The package aligns with Ghana's economic reform strategies under its IMF-supported programme. Part of broader economic reform strategy According to a statement from the World Bank, the funding—sourced from the International Development Association (IDA)—was sanctioned by the Board of Executive Directors as part of the Second Resilient Recovery Development Policy Financing operation. This initiative is aligned with Ghana's wider reform efforts under its current IMF-supported economic programme. 'Its objectives are to restore fiscal sustainability, support financial sector stability and private sector development, improve energy sector financial discipline, and strengthen social and climate resilience,' the World Bank noted. Finance Minister welcomes boost to reform agenda Ghana's Minister for Finance, Dr Cassiel Ato Forson, welcomed the development, describing it as a crucial milestone in Ghana's recovery journey. 'The successful implementation of reform actions under the IMF programme and the Development Policy Operations series (DPO) has strengthened macroeconomic stability, restored investor confidence, and laid a solid foundation for sustained economic recovery and inclusive growth,' he stated. Dr Forson added that the funding will help promote 'fiscal discipline and build a more resilient and inclusive economy, capable of withstanding future shocks.' Support for private sector and energy reforms The World Bank highlighted that the programme will facilitate the promotion of private-sector-led growth by enhancing fiscal governance, improving domestic revenue mobilisation, and reinforcing financial stability. The package will also address long-standing issues within Ghana's energy sector, focusing on financial discipline and sustainable operational management. Climate resilience and social protection in focus Additionally, the policy financing operation aims to support reforms that build social resilience and embed climate considerations into national policy frameworks—part of efforts to align with sustainable development goals and respond to emerging environmental threats. Conclusion
Arabian Post
26-06-2025
- Business
- Arabian Post
Ghana Parliament Greenlights $2.8 Billion Debt Relief Deal
Ghana's parliament has given approval to a $2.8 billion debt restructuring agreement with 25 creditor nations, including China, France, the United States, Germany and the United Kingdom. This authorisation is vital for unlocking further disbursements from a $3 billion IMF-backed bailout programme initiated in May 2023. Lawmakers, endorsing the restructuring unanimously, approved measures under a memorandum of understanding signed in January 2025 that reschedule debt payments falling due between 20 December 2022 and 31 December 2026. Repayment has been deferred until the 2039–2043 period, affording Ghana over 15 years of fiscal breathing space. Interest on the restructured debt will be set between 1% and 3%, significantly below prevailing market rates. This intervention, coordinated through the Official Creditor Committee, is poised to fortify Ghana's macroeconomic stability by easing immediate liquidity pressures and supporting long-term debt sustainability. ADVERTISEMENT Since defaulting on most of its external debt in December 2022, Ghana—Africa's second-largest cocoa producer—has worked to stabilise its economy amid high inflation, a depreciating currency and contractionary pressures. The IMF bailout has helped to arrest market downgrade momentum, including a ratings revision from Fitch. Finance Minister Cassiel Ato Forson described the deal as a turning point, enabling a reduction in debt-to-GDP to around 55% by 2026 and the debt-service-to-revenue ratio to fall below 18% by 2028. He noted the government plans to channel the fiscal space created into critical development sectors such as infrastructure, agriculture and energy. Despite official creditor backing, Ghana still faces negotiations with commercial creditors over approximately $2.7 billion in private loans. These discussions, guided by the 'comparability of treatment' principle and the most-favoured-creditor clause, aim to prevent preferential terms and ensure cohesion between official and commercial agreements. Analysts caution that failure to finalise terms with private lenders could delay full debt relief and weigh on investor confidence, even as official support strengthens. This parliamentary action is expected to unlock the next IMF tranche under the three-year programme, which will in turn support Ghana's ongoing fiscal consolidation and monetary stabilisation efforts. Reaction from the business community has been cautiously optimistic. Observers note that by deferring large debt repayments until the late 2030s and capping interest rates, Ghana can prioritise capital investments and social spending in the short to medium term. However, success will be contingent on continued IMF compliance, central bank tightening to curb inflation, and the outcome of upcoming commercial creditor talks. As Ghana progresses towards formalising these bilateral agreements, experts suggest that solidifying its economic reform agenda will be essential. Any reversal or lack of follow-through risks undermining the country's debt trajectory ahead of contested elections scheduled for 2026.
Business Insider
18-06-2025
- Business
- Business Insider
Fitch upgrades Ghana's credit rating to ‘B-‘; Outlook Stable
Global credit ratings agency Fitch Ratings has upgraded Ghana's Long-Term Foreign-Currency Issuer Default Rating (IDR) from 'Restricted Default' to 'B-', assigning a Stable Outlook. Ghana's credit rating has been upgraded from 'Restricted Default' to 'B-' by Fitch Ratings, with a Stable Outlook. Inflation has significantly decreased, reaching its lowest level in three years, supported by tighter monetary policies and improved currency stability. The Ghanaian economy has shown improved fiscal health, including higher gross international reserves and reduced public debt-to-GDP ratio. This significant development reflects growing investor confidence in the West African nation's economic recovery, spearheaded by Finance Minister Dr Cassiel Ato Forson. Eurobond restructuring and external debt talks drive upgrade Fitch's positive assessment follows Ghana's notable achievements in debt restructuring, particularly the successful renegotiation of $13.1 billion in Eurobond liabilities. The country has also made substantial progress in discussions with its remaining external creditors and is expected to conclude the full restructuring process by the end of 2025. The agency commended Ghana for restoring normal relations with the majority of its commercial lenders, suggesting that the country is re-establishing its financial credibility after a turbulent period. Inflation falls to three-year low as Cedi strengthens One of the most encouraging indicators highlighted in the report is Ghana's rapidly declining inflation. The rate has fallen from 23% in 2024 to 18.4% in May 2025—the lowest level recorded in over three years. Fitch projects that inflation will continue to fall, averaging 15% in 2025 and dropping further to 10% in 2026. This downward trend is being driven by a combination of tight monetary policy, prudent fiscal management, and improved currency stability. The Ghanaian cedi has seen significant appreciation in recent months, reversing earlier depreciation trends and easing pressure on import prices, including fuel. Fitch attributed the cedi's turnaround to 'renewed confidence in Ghana's macroeconomic fundamentals and coordinated interventions by the Ministry of Finance and the Bank of Ghana.' Public finances improve as debt and deficit decline Under the direction of Dr Ato Forson, the government has implemented a robust economic recovery strategy focused on fiscal consolidation, debt sustainability, and rebuilding investor trust. Key achievements under his leadership include: Public debt-to-GDP ratio Projected to fall to 60% in 2025 (from 93% in 2022) Gross international reserves Increased to $6.8 billion and rising Fiscal performance Primary surplus of 0.5% of GDP projected in 2025 Interest payments as share of revenue Down to 25% from a peak of 48% in 2021 Real GDP growth 5.7% in 2024; projected 4% in 2025 Senior officials at the Ministry of Finance attributed these improvements to 'the Finance Minister's bold and consistent policy direction', adding that the upgrade 'underscores the success of Ghana's path towards economic stability.' The upgraded rating is expected to enhance Ghana's appeal to international investors, support the revival of domestic capital markets, and alleviate fiscal pressures. Dr Forson, speaking earlier this month, reaffirmed the government's commitment to maintaining discipline: 'We are building an economy that works for everyone. This upgrade is a signal that Ghana is back on track, and we will not relent in protecting the gains we've made.' A turning point for Ghana's economy
Arabian Post
18-06-2025
- Business
- Arabian Post
Ghana's Credit Score Rises to ‘B-' as Debt Talks Progress
Fitch Ratings upgraded Ghana's long‑term foreign currency sovereign rating from 'restricted default' to 'B‑' on 16 June, accompanied by a stable outlook. The move reflects substantial progress in debt restructuring after the West African nation normalised relations with a large majority of its external commercial creditors. Ghana's economy endured its most severe crisis in decades, driven by collapses in its cocoa and gold sectors. The government's proactive restructuring of its debt burden laid the groundwork for this upgrade, with Fitch forecasting completion of external debt restructuring by the end of 2025. The 'B‑' rating places Ghana closer to investment‑grade territory and signals increased investor confidence. The stable outlook indicates that Fitch does not expect near‑term negative shocks to derail Ghana's fiscal consolidation. It reflects continued fiscal discipline and political commitment to structural reform following President John Dramani Mahama's inauguration in January. Finance Minister Cassiel Ato Forson has already implemented significant spending cuts, part of a broader strategy to restore macroeconomic stability and rebuild international credibility. These measures were reinforced by a similar move from S&P Global Ratings in May, which upgraded Ghana's foreign currency issuer rating to 'CCC+' from 'selective default'. Together, these upgrades underscore growing confidence in Ghana's recovery trajectory. ADVERTISEMENT Fitch's report highlights that servicing foreign currency debt—including domestic‑issued dollar bonds—is projected to consume around 1.2 per cent of gross domestic product in 2025, rising modestly to 1.4 per cent by 2026. Domestic currency interest costs for the same period are estimated at approximately 3.8–3.9 per cent of GDP, with total debt servicing ratios stabilising after peaking at 48 per cent in 2021. On the external front, Fitch projects Ghana's current account surplus, which peaked at around 4.3 per cent of GDP in 2024, will moderate to about 1.1 per cent by 2026 due to increased import demand and softer export commodity prices. However, inflation, which stood at 23 per cent in 2024, is expected to subside to around 15 per cent by the close of 2025 and further to 10 per cent in 2026, aided by a strengthening cedi and disciplined monetary policy. Fitch anticipates economic growth to remain robust at about 4 per cent in 2025, accelerating to approximately 4.5 per cent in 2026. This expansion will be driven by recovery in the agricultural sector—especially cocoa production—and continued momentum in the industrial and services sectors. Despite the positive assessments, Fitch has emphasised key risks that could undermine its stable outlook. Chief among these are renewed liquidity pressures, potential loss of confidence in Ghana's ability to refinance short‑ and medium‑term obligations, and strains on external reserves if the current account deficit widens unexpectedly. Investor sentiment is likely to sharpen its focus on Ghana's ability to fully deliver on its debt restructuring plan and preserve macroeconomic stability. As the country moves toward concluding bilateral and bondholder agreements by year‑end, the global market will be assessing not just the formal rating upgrade, but the implementation of structural reforms and fiscal prudence underpinning it. This credit progression carries implications beyond bond markets. It enhances Ghana's standing in international financial circles, potentially lowering its cost of future borrowing and attracting foreign direct investment. It also sets a precedent for other African nations navigating debt distress in the wake of global commodity and financial volatility.
