Over the past year, Ghana’s economy has experienced a period of economic hardship. A severe economic and financial crisis in Ghana was brought on by a confluence of significant external shocks and pre-existing fiscal and debt vulnerabilities, according to the IMF.
High inflation, a depreciation of the local currency, high interest rates, high levels of debt, and muted economic development were some of the effects of the economic crisis.
Bond prices have dropped as a result of the aforementioned difficulties. The market value of Collective Investment Schemes, whose underlying assets are Government of Ghana (GoG) bonds, decreased as a result of the reduction in bond prices.
Ghana requested a Balance of Payment (BoP) support from the IMF in July 2022 as a result of the economic troubles in order to help Ghana get through them. Ghana has gained IMF board level clearance for a US$3 billion Extended Credit Facility following the two parties’ December 2022 Staff Level Agreement, which was contingent on debt restructuring.
Prior to the IMF’s board’s approval, a number of Ghana’s macroeconomic indicators had begun to show signs of improvement, including a fall in interest rates and four months of uninterrupted declines in inflation. Our Collective Investment Schemes’ prices have already reflected this.
We believe that the IMF agreement could hasten Ghana’s economic recovery and aid in the rise in bond prices, which in turn helps to increase the market value of our collective investment schemes.
As Ghana sets out on its path to economic recovery, we implore you, our valued client, to maintain your composure and stick to your investment strategy.
Credit: EDC Investments Ltd
