<\/p>\n
Ken Ofori-Atta<\/strong><\/p>\n STANDARD BANK Group Limited has stated that Ghana\u2019s economy is on steep decline and requires sharper focus of the economic managers to address the issue of debt sustainability.<\/p>\n According to the continent\u2019s biggest bank, Ghana, Kenya, Angola, Ethiopia and Zambia will face \u201cdebt risks over the next two years\u201d since \u201cextraordinary pandemic-induced stimulus and relief for poor nations\u201d are moribund.<\/p>\n A report by\u00a0Bloomberg News<\/em><\/strong>\u00a0quoted the Head of African Research at the Standard Bank Group Limited, Jibran Qureishi, as saying that the bulk of Ghana\u2019s debt is held by commercial lenders, which has \u201celevated pressure\u201d on the country with its debt risks jumping on \u201cdeteriorating public finances.\u201d<\/p>\n The report said the bank\u2019s data on Ghana\u2019s fiscal years pointed out that between 2020 and 2021, Ghana\u2019s debt held by commercial lenders constituted 51.1%, and multilateral lenders constituted 33.5%.<\/p>\n It added that the country\u2019s external debt held by bilateral lenders is 5.2%, concessional lenders is 6.2% and export credit agencies held only 3.9% as against 8.4%\u00a0\u00a0between 2014 and 2015 and 11.3% between 2011 and 2012.<\/p>\n The report stated that between 2014 and 2015, concessional lenders held 13.6% of Ghana\u2019s debt, while commercial lenders held only 16.4%, and 36% for multilateral lenders.<\/p>\n The Johannesburg-based lender reportedly said while Ghana is the \u201cfragile five\u201d of 18 countries covered in a recent report, Uganda is among the continent\u2019s brightest stars in 2022.<\/p>\n The bank asserted that Ghana probably needs an International Monetary Fund (IMF) package to restore confidence in investors, noting that holding the nation\u2019s debt currently demands a premium over U.S. treasuries of more than 1,000 basis points, a level considered distressed.<\/p>\n \u201cLenders see a re-financing in the Eurobond market to be unviable when the U.S. Federal Reserve increases interest rates and if Ghana\u2019s budget targets prove elusive,\u201d\u00a0Bloomberg News\u00a0<\/em><\/strong>again reported.<\/p>\n With China more cautious about lending to African nations, the IMF is Ghana\u2019s main hope if the country can\u2019t improve its fiscal position, Mr. Qureishi is said to have stated, and added that stabilizing public finances may prove difficult given the government\u2019s \u201coverly ambitious\u201d revenue estimates, while efforts to cut spending could face hurdles with public-sector wages and debt-service costs accounting for more than half of expenditure.<\/p>\n No IMF<\/strong><\/p>\n However, the Finance Minister, Ken Ofori-Atta, insists going to IMF for a bailout is not an option, intimating that \u201cwhatever we do we are not going to the IMF.\u201d<\/p>\n \u201cThe consequences are dire. We are a proud nation. We have the resources. We have the capacity. We are not people of short sight,\u201d he stated emphatically.<\/p>\n Kenya<\/strong><\/p>\n Meanwhile, the Standard Bank Group Limited said there is a growing concern for Kenya\u2019s debt-service costs, which make up more than a third of forex reserves.<\/p>\n According to the bank, while Kenya is still able to refinance its debt and is considering a $1 billion Eurobond in the first half of the year, political risks linked to the country\u2019s upcoming elections in August have the potential to delay efforts to stop borrowings and close the budget deficit.<\/p>\n The report said East Africa\u2019s largest economy has accumulated debt, including a high concentration of commercial loans, with servicing costs now at 35% of foreign-exchange reserves and 43% of tax revenue.<\/p>\n For Standard Bank, Kenya falls into the same bracket as Ghana from a fiscal perspective, but noted that the main difference between the two countries is an IMF programme that Kenya secured last year.<\/p>\n By Ernest Kofi Adu<\/strong><\/p>\n \n\t<\/div>\n","protected":false},"excerpt":{"rendered":" Ken Ofori-Atta STANDARD BANK Group Limited has stated that Ghana\u2019s economy is on steep decline and requires sharper focus of the economic managers to address the issue of debt sustainability. According to the continent\u2019s biggest bank, Ghana, Kenya, Angola, Ethiopia and Zambia will face \u201cdebt risks over the next two years\u201d since \u201cextraordinary pandemic-induced stimulus […]<\/p>\n","protected":false},"author":1,"featured_media":175942,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[72],"tags":[557,225,4866,170],"class_list":["post-993740","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-bank","tag-govt","tag-standard","tag-warns"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/993740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=993740"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/993740\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=993740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=993740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=993740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}