Ghana market forecast for 2017

2016 presented a challenging landscape for the financial markets in Ghana, particularly impacting the local currency. Looking ahead to the forecast for 2017, Sulemana Mohammed, CEO of Doobia, provides a detailed outlook on Ghana's financial markets. Discussing the past year, Mohammed highlights the significant borrowing by the government in 2016, leading to an increase in interest rates on T-bills and bonds. The movement in rates across the curve was notable, setting the stage for a potentially interesting year in 2017. Mohammed predicts that while there may be movement in yields, it might not be as aggressive as seen in 2016. He emphasizes that the Debt Management Office's (DMO) plan to issue between 340 billion to 430 billion in the first quarter of 2017 indicates a significant amount compared to the same period in 2016, hinting at potential market movements. Regarding the government's borrowing plans, Mohammed notes that a major portion of the funds will be sourced locally, with the remaining from Euro markets and bilateral borrowing. While acknowledging the challenges faced by the government in raising funds towards the end of 2016, Mohammed suggests that raising funds in 2017 may see some difficulties. The participation of offshore investors in the market and the reaction of various market players will play a vital role in determining the success of the borrowing activities. Mohammed anticipates continued interest in longer-tenured bonds from PFEs and asset managers, compensating for any under-subscription in short-term offerings. Concerns are raised about the government's continuous borrowing to repay previous debts, with Mohammed pointing out the need for efficiency in budget allocation and revenue generation. He underlines the importance of addressing recurrent expenditure and increasing revenue streams to alleviate the strain on the budget. The inefficiencies in budget management and the need to boost productivity remain central themes in the discussion. Lastly, the conversation shifts to the performance of Ghana's currency. The ongoing silence from the government on currency issues raises concerns, especially in light of past volatility in the exchange rate. Mohammed emphasizes the unresolved challenges in the FX market and questions the government's strategies to stabilize the currency. With uncertainties looming in the FX space, Mohammed hints at the potential repercussions of delaying significant interventions. The unresolved currency issues continue to cast a shadow over the financial outlook for Ghana in 2017, with a call for proactive measures to address the underlying concerns.