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Ghana plans to raise rates by 175 basis points later in January. Here’s why

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There are indications to believe that the Bank of Ghana, plans to deliver another hefty interest rate hike at its meeting later this month, with the country’s currency and public finances still under pressure.

A survey by news agency earlier this year points to a possible plan that the Bank of Ghana to raise rates 175 basis points to 28.75%, with only two expecting the bank to hold at 27.00% and the rest opting for a hike in a 100-400 basis point range.

“In Ghana, despite the central bank delivering 1,350 basis points of interest rate hikes, inflation has continued to rise,” said Virág Fórizs at Capital Economics.

“With price pressures showing no sign of easing, we expect policymakers to raise the benchmark rate further,” said Fórizs.

According to a senior economist at Oxford Economics, Pieter du Preez, said developments in the Ghanaian economy are unique at this stage and cannot be directly compared to other economies and central bank decisions elsewhere, where the trend is to slow the pace of tightening.

“The cedi appreciating in December will aid in driving inflation lower, but we only forecast this to happen from February or March onwards,” du Preez said.

As part of the many moves to get out of the economic doldrums, Ghana recently offered to pay holders of its 2023 bond a 2% cash fee in exchange for registering for the exchange.

Ghana’s currency, Cedi is currently rated the world’s worst-performing in 2022 as investors continued to squeeze foreign capital into the West African country.

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Mozambique President Filipe Nyusi, TotalEnergies, discuss over gas project

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Discussion on the humanitarian situation in the Cabo Delgado area in Mozambique is ongoing between The head of TotalEnergies and Mozambique President Filipe Nyusi.

TotalEnergies’ chairman and chief executive Patrick Pouyanne had visited the Cabo Delgado area to review the security and humanitarian situation, and Pouyanne had met the Mozambique President during his trip.

The multinational revealed that it has engaged Jean-Christophe Rufin, whom it said was an expert in humanitarian action and human rights, with an independent mission to assess the humanitarian situation in Cabo Delgado province.

Pouyanné said, “since 2021, the situation in Cabo Delgado province has improved significantly, thanks in particular to the support provided by the African countries that committed themselves to restore peace and security.”

“The mission entrusted to Jean-Christophe Rufin should enable Mozambique LNG’s partners to assess whether the current situation allows for a resumption of activities while respecting human rights,” he added.

A force majeure’ was declared in 2021 on TotalEnergies’ Mozambique LNG project, valued at $20 billion, due to regional unrest after an insurgent group linked to Islamic State attacked the northern town of Palma.

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Sierra Leone, Liberia, 2 others, receive $311 million from World Bank for renewables

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Four West and Central African countries are set to receive aid worth $311 million from the World Bank after signing an agreement that would improve renewable energy projects.

The countries, Sierra Leone, Liberia, Togo, and Chad will receive funds will finance around 106 megawatts (MW) of solar power generation capacity with battery energy and storage systems, and a 41 MW expansion of hydroelectric capacity.

Commenting on the development, Sierra Leone President Julius Maada Bio, who presided over the signing ceremony on Wednesday, said the deal was the beginning of a revolution in energy supply and access in the respective countries.

“We are paying far more for energy now than we were 18 months ago. Very high and rising energy prices continue to have an adverse impact on other sectors of our economies,” Maada Bio said.

The World Bank’s Director for Regional Integration, Boutheina Guermazi said the project was the first time four countries had been brought together for a regional energy approach.

“It is a continental approach to make sure that we reach universal access to clean affordable energy by 2030,” Guermazi said, adding that the project would be completed in four years.

The West and Central sub-regions of Africa have one of the lowest electrification rates coupled with some of the highest electricity costs in Sub-Saharan Africa.

Under a new World Bank Regional Emergency Solar Power Intervention Project, the West Africa Power Pool, a regional approach to improve electricity in the sub-region, will also receive some funds approved in December.

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