Ghana’s Akufo-Addo predicts recovery in 2021 and stresses need to diversify economy

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GHANA’S President Nana Akufo-Addo on Tuesday predicted a sharp economic rebound in 2021 after a pandemic-induced downturn thanks to new mining projects, increased manufacturing and expanded financial services.

Ghana, West Africa’s second-largest economy and a major producer of gold, oil and cocoa, saw economic growth slide to an estimated 1.9 percent in 2020, the lowest in decades. The country’s debt-to-GDP ratio rose past 70 percent and prompted the International Monetary Fund to warn about possible debt distress.

In his first state of the nation address since his re-election in December, Akufo-Addo said economic growth would top 5 percent this year. He touted recent investments by carmakers such as Volkswagen as well as nascent bauxite mining and alumina refinery projects.

‘In spite of the ravages of the pandemic, our nation is still very much in rude health and remains attractive to investors,’ Akufo-Addo said.

To finance its 2021 budget and manage its debt, the government plans to borrow up to $5bn from capital markets in 2021, including Eurobonds, diaspora bonds, syndicated loans and bridge loans, the finance ministry said on Tuesday.

It has mandated Bank of America, Citi Bank, Rand Merchant Bank, Standard Chartered Bank and Standard Bank as lead managers, the ministry said in a statement.

In his speech, Akufo-Addo also stressed the need to reduce Ghana’s reliance on foreign aid and diversify its economy beyond commodities such as cocoa, of which Ghana is the world’s second-largest producer.

Last week, Ghana’s supreme court upheld Akufo-Addo’s victory in a December 7 election, which the runner-up had challenged over alleged irregularities.

The election was marred by voting-related violence that killed at least five people, a rarity in a country that has a reputation as one of West Africa’s most stable democracies.

 

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