Ghana borrowings may prompt eventual return to the IMF

Significance

The Bank of Ghana (BoG) has bought up unprecedented levels of treasury bonds but now wants to scale back its role. Finance Minister Ken Ofori-Atta is looking to international capital markets to plug the gap, once he returns from medical leave abroad, but fixed-income investors are urging Ghana to enter a new IMF programme.

Impacts

• Ghana's predicament will undermine the African growth narrative, hitting yields on Eurobonds issued by its peers.
• Ofori-Atta's absence will raise fears of his incapacitation and the damage that would cause to a finance ministry shaped in his image.
• Rising inflation is likely to go unchecked until BoG Governor Ernest Addison starts his second term in April.