In the 2023 report, we highlighted the legal and regulatory themes which we expected to impact activities within the financial services industry in 2023 and discussed the challenges and opportunities those issues would present. In this 2024 edition, we review the key market and regulatory developments from the 2023 financial year, consider how our projections for 2023 fared, and offer insights into the global and domestic trends which are shaping our outlook for business, legal and regulatory developments within the financial sector in 2024.
2023 Under Review – Turning the Corner?
Performance of the National Economy
In our 2023 report, we recounted how global and domestic events bruised and battered the Ghanaian economy in 2022. By year-end 2022, Ghana had commenced a domestic debt restructuring programme (DDEP) and defaulted on its external debt, having announced a suspension on all debt service payments under certain categories of its external debt (including Eurobonds, commercial term loans and most of Ghana's bilateral debt). There were mixed reviews on the outlook for 2023 but the projections largely tilted towards the negative. For instance, Fitch projected a gross domestic product (GDP) growth of 2.9% and gradual slowdown in inflation, while the African Development Bank predicted a GDP growth of 1.7% and a reduced but still elevated inflation rate of 44.7%.
Economic reports indicate that the economy outperformed the dim expectations, with a GDP growth rate of 3.2% as at H1-2023 and a reduced headline inflation rate of 35.2% as at October 2023. Regarding currency stability (which was among the major challenges of 2022), the GHS performed better against its major trading partners, with a cumulative year to September 2023 depreciation of 22.9%, 24.1% and 22.4% against the US Dollar, British Pound Sterling and the Euro respectively, as compared to depreciations of 37.5%, 24.1% and 27.5 percent% respectively in the same period of 2022. Ghana's total public debt also declined from 73.1% of GDP to 66.4 % of GDP as of September 2023, largely due to the successful completion of the DDEP.
These statistics seem to validate our prediction that the finalisation of Ghana's deal with the International Monetary Fund (IMF) (which was pending for board approval at the time our 2023 report was published) would signal the "turning point" for our national economic misfortunes. The Government of Ghana and the IMF eventually concluded a 36-month USD 3 billion programme for the recovery of our national economy. As at the date of this report, Ghana has received the first tranche of USD 600 million, and (with the IMF executive board having successfully completed its first review of Ghana's performance thus far and reporting that Ghana met all quantitative performance criteria and almost all indicative targets and structural benchmarks) is set to receive a second tranche of USD 600 million. Clearly, the economy is on the mend but 2023 only marked our start on the path to recovery.
Review of key developments and updates to our 2023 legal and regulatory outlook
The year ahead – legal and regulatory outlook for 2024
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