Ghana: Akufo-Addo’s ‘no bond haircut’ promise met with skepticism

By Jonas Nyabor
Posted on Tuesday, 1 November 2022 17:53, updated on Wednesday, 2 November 2022 11:27

President of Ghana Nana Addo Dankwa Akufo-Addo
President of Ghana Nana Addo Dankwa Akufo-Addo waits to speak during the UN Climate Change Conference COP26 in Glasgow, Scotland, Tuesday, Nov. 2, 2021. (Hannah McKay/Pool via AP)

As Ghana negotiates a deal with the IMF, President Akufo-Addo has given assurances that there will be no loss to holders of government bonds, but analysts are skeptical if this will do the economy any good in the face of the country’s debt crisis.

Rumours about a possible haircut on government bonds owing to the country’s IMF negotiations sent Ghana’s financial market into a tailspin in October. Citizens marched to banks and forex bureaus to buy US dollars as the cedi tumbled further to record lows – depreciating by 9% in the week beginning 10 October.

The cedi gained 4% against the dollar in the week ending 28 October. Currently, the exchange rate is ¢13.60 to the dollar.

In his first major national address on the economic downturn, President Akufo-Addo told bondholders to rest assured they will not lose their money.