Economy
IMF Okays $94.2m Funding Package for Ghana
By Dipo Olowookere
The disbursement of $94.2 million has been approved for Ghana by the Executive Board of the International Monetary Fund (IMF).
This followed the completion of the fourth review of the arrangement under the Extended Credit Facility (ECF), bringing total disbursements under the arrangement to $565.2 million, with the remainder being tied to the remaining reviews.
The Board also approved Ghana’s request for waivers of non-observance of performance criteria, and modification of one performance criterion; and the extension of the arrangement by one year.
Ghana’s three-year arrangement for $918 million or 180 percent of quota at the time of approval of the arrangement was approved on April 3, 2015.
It aims to restore debt sustainability and macroeconomic stability in the country to foster a return to high growth and job creation, while protecting social spending.
Deputy Managing Director and Acting Chair of the IMF Executive Board, Mr Tao Zhang, remarked that Ghana’s macroeconomic performance over the years has been mixed.
Policy slippages have compounded the adverse impact of shocks and resulted in significant external and domestic imbalances.
He said the new government has committed to macroeconomic stability, fiscal discipline, and an ambitious reform agenda. Decisive implementation of these policies and reforms would allow Ghana to reap its economic potential and achieve higher and more inclusive growth rates. These efforts will be supported by the continued implementation of the ECF program.
“The authorities have taken some encouraging steps and the economy is showing signs of recovery. As risks remain tilted to the downside, careful fiscal management will be required to achieve the 2017 program targets and reverse the unfavourable debt dynamics.
“Additional efforts are needed to address revenue shortfalls, while expenditure control measures should be fully enforced to contain current spending, and prevent the recurrence of domestic arrears.
“Ongoing fiscal consolidation and implementation of the medium-term debt management strategy will be key to further reducing domestic refinancing risks.
“Fiscal consolidation efforts will need to be anchored in wide-ranging structural fiscal reforms, so that consolidation gains can be sustained over the medium term. These include measures to broaden the tax base, and enhance tax compliance and public financial management, especially considering the large unpaid commitments accumulated in 2016.
““The authorities should tackle energy sector inefficiencies, particularly improving the management of the state-owned enterprises (SOEs). Ongoing debt restructuring efforts are helpful but are no substitute to stemming the SOEs’ ongoing financial losses and put them on a sustainable financial path.
“As inflation continues to decelerate, the Bank of Ghana (BoG) should remain vigilant in order to bring inflation back to target. The BoG should continue to strengthen the credibility of the inflation-targeting framework, which would benefit from efforts in the development of the foreign exchange market. The central bank should also continue its policy on zero financing of the government.
“The authorities have made significant progress in the implementation of the banking system roadmap, in particular through the approval of timebound recapitalization plans for banks found to be undercapitalized, and the resolution of two insolvent banks.
“Further steps to strengthen the supervisory and regulatory framework, reduce outstanding liquidity assistance, and buttress the microfinance sector will help build a more robust financial sector that is well positioned to support growth and promote financial inclusion.”
Ghana has shown mixed macroeconomic performance in recent years, with significant shocks being amplified by policy slippages and resulting external and domestic imbalances. Growth in 2016 was 3.5 percent, the lowest level in two decades. A recovery of growth is expected in 2017-18, owing to an increase in oil production, declining inflation, and lower imbalances with the right policy implementation.
Following a sizeable fiscal slippage in 2016, the authorities are targeting a significant fiscal consolidation in 2017, which will require sustained revenue collections and spending controls. Inflation has continued to decline and the exchange rate has been broadly stable. The external position has continued to improve, supported by strong foreign investors’ participation in the domestic debt market.
Over the medium term, both the fiscal deficit and the current account deficit are projected to decline gradually.
By Dipo Olowookere
The recalibration of portfolios by investors further depressed the Nigerian Exchange (NGX) Limited on Thursday by 0.05 per cent in the absence of a positive trigger.
Amid the profit-taking, the banking space continued to witness bargain-hunting during the session, rising at the close of business by 1.04 per cent.
However, sell-offs crushed the insurance sector by 1.23 per cent, the consumer goods index depreciated by 0.81 per cent, and the energy sector lost 0.36 per cent, while the industrial goods counter closed flat.
As result, the All-Share Index (ASI) depreciated by 47.93 points to 102,788.20 points from 102,836.13 points and the market capitalisation gained N1 billion to close at N63.148 trillion compared with the preceding day’s N63.147 trillion.
Like the previous session, the market breadth index was flat after the bourse ended with 28 price gainers and 28 price losers.
Morison Industries depleted by 9.98 per cent to N3.61, C&I Leasing slumped by 9.91 per cent to N3.91, Ikeja Hotel crashed by 8.89 per cent to N12.30, Neimeth went down by 8.51 per cent to N3.44, and Sunu Assurance shed 8.03 per cent to settle at N5.50.
But SCOA Nigeria gained 9.76 per cent to sell for N3.60, DAAR Communications increased by 9.09 per cent to 84 Kobo, May and Baker jumped by 8.43 per cent to N9.00, Prestige Assurance appreciated by 6.82 per cent to N1.41, and Red Star Express chalked up 4.99 per cent to finish at N5.05.
The activity chart was mixed yesterday after the trading volume shrank by 0.10 per cent, the trading grew by 50.00 per cent, and the number of deals leapt by 12.95 per cent.
A total of 394.4 million stocks valued at N22.8 billion were traded in 12,160 deals during the session versus the 394.8 million stocks worth N15.2 billion transacted in 10,766 deals in the preceding day.
GTCO ended as the busiest equity after the sale of 42.2 million units for N2.6 billion, UBA traded 37.5 million units worth N1.3 billion, Zenith Bank transacted 25.2 million units valued at N1.2 billion, Access Holdings exchanged 24.3 million units for N601.6 million, and Jaiz Bank traded 13.8 million units worth N41.4 million.
By Adedapo Adesanya
Nigerian energy company, Oando Plc, has won the bid for the operatorship of oil block KON 13 in Angola.
The company, which recently acquired Eni of Italy’s oil assets in Nigeria, disclosed on Wednesday that the award of the oil block located in Angola’s onshore Kwanza Basin followed a competitive bidding process by the country’s oil and gas sector regulator.
Oando disclosed that the asset, in which it owns 45 per cent participating interest, has an estimated prospective resources of 770 to 1,100 million barrels of oil. Oando is handling its operations relating to the asset through its upstream subsidiary, Oando Energy Resources (OER).
“Oando Plc (the company), Africa’s leading indigenous energy solutions provider listed on both the Nigerian Exchange Limited and Johannesburg Stock Exchange is pleased to announce that its upstream subsidiary, Oando Energy Resources (OER), has been awarded operatorship of Block KON 13 in Angola’s Onshore Kwanza Basin, following a competitive bidding process organised by the Angolan National Agency for Petroleum, Gas, and Biofuels (ANPG).
“Block KON 13 is strategically located in the prolific Kwanza Onshore Basin which represents significant exploration potential in both pre-salt and post-salt plays, with estimated prospective resources of 770 to 1,100 million barrels of oil.
“The block has two exploration wells previously drilled to a target depth of 3,000m, with oil and gas observed across various depths. With a 45 per cent participating interest, OER will lead the development of the block as an operator, alongside Effimax (30 per cent) and Sonangol (15 per cent) as co-venturers,” it stated.
Commenting on the award, the chief executive of Oando Plc, Mr Wale Tinubu, expressed confidence in the capacity of the company, in collaboration with its co-venturers, to unlock the full potential of the asset for the country.
“We look forward to collaborating with our co-venturers and other key stakeholders to harness this opportunity and unlock its full potential for Angola and Africa as a whole,” Mr Tinubu said.
This milestone, the company said, marks its strategic entry into the Angolan oil and gas market and represents a significant step in its long-term vision to grow its upstream operations across Africa.
According to Oando Plc, it also solidifies the company’s position as a prominent player in the continent’s energy landscape, evolving from a local indigenous operator to a regional powerhouse.
Following the company’s recent successful acquisition of NAOC Ltd in Nigeria, the addition of Block KON 13, the energy firm stressed, further bolsters the company’s upstream portfolio and reflects its commitment to driving regional growth and energy security.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange appreciated by 0.74 per cent on Wednesday, January 22 as a result of buying pressure on the market.
Yesterday, the NASD Unlisted Security Index (NSI) garnered 22.86 points to wrap the session at 3,123.19 points compared with 3,100.33 points recorded in the previous session, as the value of the unlisted securities market went up at midweek by N5 billion to close at N1.076 trillion, in contrast to the preceding day’s N1.071 trillion.
The alternative bourse ended with three price gainers and two price losers at the Wednesday session.
Mixta Real Estate Plc improved its value by 25 Kobo to end at N2.83 per unit compared with the previous day’s N2.58 per unit, Okitipupa Plc jumped by N3.56 to close at N43.55 per share versus N39.99 per share, and First Trust Mortgage Bank Plc added 2 Kobo to settle at 39 Kobo per unit compared with Tuesday’s trading price of 37 Kobo per unit.
On the flip side, UBN Property Plc lost 16 Kobo to end at N1.86 per share, in contrast to the preceding session’s N2.00 per share, and Mass Telecomm Innovation Plc went down by 1 Kobo to 41 Kobo per unit from 40 Kobo per unit.
During the session, there was a 216.2 per cent rise in the volume of securities traded to 581,160 units from 183,780 units, the value of securities traded by investors decreased by 48.9 per cent to N2.3 million from N4.5 million, while the number of deals increased by 84.6 per cent to 24 deals from 13 deals.
When the bourse closed for the day, Industrial and General Insurance (IGI) Plc was the stock with the highest trading volume (year-to-date) with 25.3 million units valued at N5.9 million, followed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units worth N162.9 million.
By value, FrieslandCampina Wamco Nigeria Plc topped the activity chart after selling 4.1 million units worth N162.9 million, trailed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and 11 Plc with 55,358 valued at N14.5 million.
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