Ghana Replaces Finance Minister as Debt Talks, Election Loom

Ekow Dontoh and Colleen Goko
·3 min read
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(Bloomberg) -- Ghanaian President Nana Akufo-Addo replaced his finance minister as the West African nation looks to secure an agreement with commercial creditors on restructuring its debt and before elections in December.

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Mohammed Amin Adam, currently the minister of state for finance, will replace Ken Ofori-Atta with immediate effect, the president said Wednesday in a statement in the capital, Accra. Twelve other ministers and 10 deputy ministers were relieved of their duties in the reshuffle, he said.

Ofori-Atta had been finance minister since 2017.

During his tenure, he faced criticism for his handling of the nation’s economic crisis — Ghana’s currency plunged and yields on its eurobonds surged on concerns about the sustainability of its debt — and narrowly survived a censure motion in parliament in December 2022. He then successfully led negotiations to secure a $3 billion bailout from the International Monetary Fund as well as an agreement with bilateral creditors to restructure the West African nation’s loans.

The timing of the cabinet overhaul coincides with preparations for presidential elections in December, when ruling-party candidate and Vice President Mahamudu Bawumia will seek to succeed Akufo-Addo. Bawumia has opposed policies implemented by Ofori-Atta, including a controversial levy on electronic financial transactions that he’s vowed to abolish if he becomes president.

“It looks like the focus of the reshuffle is towards the December election where the flag bearer is trying to exert some level of influence,” said Godfred Bokpin, a finance professor at the University of Ghana.

Ghanaian dollar bonds maturing in 2032 fell for a sixth day, slipping 0.18 cent to 44.35 cents on the dollar at 11:08 a.m. in London.

Adam pledged to stick to the IMF program and ongoing reforms in the energy and financial sectors.

“I want to assure the IMF and the investor community that I will make sure that the program continues to be on track,” he said in remarks broadcast on Citi FM radio in the capital, Accra. “We shall fulfill all our commitments, including the reforms in the energy and financial sectors in the program.”

Ghana’s government reached a deal with bilateral creditors last month to restructure $5.4 billion of loans and has set a target date of March 31 of reaching a similar agreement with commercial creditors. The change may cloud the outlook for talks on revamping its eurobonds.

“It’s difficult to know for sure if this could delay or accelerate the debt-restructuring process,” said Adriaan du Toit, director of emerging-market economic research at AllianceBernstein. “It’s more likely to be the former, which creates more uncertainty and risks. Even more so with the elections scheduled for later in the year.”

Read More: How Once-Thriving Ghana Was Forced to Seek IMF Help: QuickTake

Adam, 49, previously served as deputy minister of energy before his appointment as minister of state at the Finance Ministry. He holds a doctorate in petroleum economics from the Centre for Energy, Petroleum & Mineral Law and Policy at the University of Dundee in the UK and both master’s and bachelor’s degrees in economics from the University of Cape-Coast.

--With assistance from Rene Vollgraaff.

(Updates with comment from Adam in eighth paragraph.)

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