Improved Investor Confidence and the Stabilization of the Cedi; a good time to invest!
Last week can arguably be described as a land mark week for the Republic of Ghana. The week in question saw Global Capital markets give a significant vote of confidence in the Ghanaian economy - over-subscribing its US$3 billion Eurobond sale by five times more than the amount of money the country had asked for. This issue was also at comparatively very low rates. Subsequent to an initial request to raise US$3bn, investors responded with a US$15bn offer. This bond over-subscription clearly demonstrated growing confidence in Ghana’s medium to long term economic growth prospects as the Country continues to weather-the-storm of the global economic downturn.
Earlier in the same week, Bloomberg had adjudged Ghana’s currency the best performing against the dollar, and its Central Bank also voted the best performing African Central Bank. Global ratings agency Moody’s had also reviewed Ghana’s rating outlook from stable to positive.
Furthermore, with the relative stabilisation and marginal appreciation of the beleaguered national currency, the Cedi against the United States Dollar, the ordinary citizen can be confident that the economy as a whole and specifically the climate for doing business will improve over time and thus fuel growth in the financial sector as well. This rebound is necessary considering the post financial sector reform recovery period currently underway.
For the average citizen, this indeed is an opportune time to invest disposable incomes. It is therefore essential that you keep some form of an investment fund in order to generate returns and protect your purchasing power. Although businesses are competing to stay alive in turbulent situations like we have now, buying stocks are still some of the best ways to invest now for the long term.
Notwithstanding the above successes chalked, Investors are concerned about the government ability to stick to spending targets as it gets closer to an election this year. This is critical as it has the potential to erode some of the gains chalked so far.