🔅 Ghana could default
Debt stock has more than doubled since 2015
Good morning,
Markets are down across the board, and Ghana’s economy could default. Read on to learn more…
Markets Today
📉 Nigerian Stock Exchange: 49,421.91 (-0.05%)
📉 Johannesburg Stock Exchange: 12,831.80 (-1.18%)
📉 Nairobi Securities Exchange: 134.75 (-0.16%)
📉 US S&P 500: 3,789.93 (-1.71%)
📉 Shanghai Composite: 3,108.91 (-0.27%)
Kenya's commerce with its biggest export market, Uganda, has decreased in the last financial year, while trade with other countries in the region skyrocketed. Kenya has banned Uganda's exports of chicken, dairy, and sugar in recent years, leading traders to lose billions of shillings as produce was left to rot in trucks at the border. Kenya's exports to Tanzania increased by 46% during the same time, while exports to Rwanda increased by a record 39%.
Elsewhere, the US central bank raised interest rates to the highest level in almost 15 years as it fights to rein in soaring prices. The Federal Reserve announced it was raising its key rate by another 0.75 percentage points, lifting the target range to 3% to 3.25%. Borrowing costs are expected to climb more - and remain high, the bank said. The move comes despite mounting concern that the cost of controlling inflation could be a harsh economic downturn.
Debt
Ghana’s economy likely to default.
According to a senior director at the ratings firm Fitch, Ghana's sovereign debt default is a possibility, and any form of domestic debt restructuring might severely threaten the local banking industry.
Government data shows that Ghana's debt stock has more than doubled since 2015, rising from 54.2% of GDP that year to 76.6% at the end of 2021.
According to reports, Ghana is intending to restructure its local currency debt as part of an IMF arrangement, which will generate severe problems for the local banking sector, insurance companies, pension funds, and asset managers.
On Wednesday, Ghana's sovereign dollar-denominated bonds fell as much as 1.6 cents versus the dollar.
Across the Continent
Other Headlines
🇹🇩 Last week, a clash between nomadic herders and sedentary farmers in south Chad killed at least 19 people. Deadly clashes are rather common, primarily between herders and local farmers who accuse them of grazing animals on their territory. Chad, a regional force and Western ally against Islamist terrorists in West Africa, has been in chaos since ex-President Idriss Deby was assassinated fighting rebels in the north last year.
🇳🇬 Nigeria's President Muhammadu Buhari slammed fellow leaders who stretch term limits in order to stay in office, promising free and fair elections when the country elects his successor in February. Buhari stated at the recent United Nations General Assembly that Africa's most populous country had invested extensively to secure free and fair elections. "We believe in the sanctity of constitutional term limits and have consistently followed them in Nigeria. We've seen the corrosive effect on ideals when leaders elsewhere try to modify the rules in order to stay in power "Buhari stated.
🇬🇦 Guy Nzouba-Ndama, Gabonese opposition leader, has been placed under house arrest five days after being seized at the Congolese border with luggage containing around $2 million (£1.8 million). His arrest was videotaped, and the opening of the suitcases was broadcast on social media. Mr Nzouba-Ndama, a potential presidential candidate, has been charged with violating import regulations and cooperating with a foreign power. His Democratic Party claims the accusations are politically motivated.
Around the World
Russia arrests hundreds after call-up protests
Hundreds of protestors have been jailed in Russia in response to the Kremlin's decision to send thousands more troops to battle in Ukraine.
Russia's president has ordered a partial mobilization, which means that 300,000 military reservists - not conscripts - will be summoned to help Russia's forces recover from recent battlefield defeats in Ukraine.
Mr Putin stated that he would use "all available means" to safeguard Russian territory, which could include nuclear weapons.
The anti-war opposition group Vesna called for widespread protests and reported numerous arrests across Russia on Telegram. Pavel Chikov, a lawyer for the Russian human rights organization Agora, said the organization has received 6,000 requests about troops' rights since Tuesday morning.
Because of media limitations, it is difficult to measure the extent of Russian resistance to the Kremlin's line on Ukraine.