Ghana: Markets react positively to verdict

As one might expect the Supreme Court verdict in favour of the NDC and Mahama was positively received by the financial markets, which had been perturbed by the uncertainty created by the impending decision, the risk of unrest, the impact of a full or partial election re-run, and the partial paralysis of Ghana's political system due to this uncertainty.

In financial terms as the confidence of investors in Ghana increases, yields - or the implied market-demanded effective interest rates on outstanding bonds, given bonds' market price - on Ghana's cedi denominated bonds have indeed been falling. Rates on the planned September auctions of around 600 million cedis worth of bonds have perhaps fallen by between 2%-4% to as low as 17% - a rate not to be confused with the much lower rates and yields on the dollar denominated Ghana Eurobond.

 

Cedi depreciation may well also be slowed as investors stop the shift to dollar-denominated assets due to electoral uncertainty - with Elvis Darku of Nigeria's Access Bank projecting a slight cedi appreciation versus the dollar by the end of the year. This is even if other analysts remain pessimistic and unlikely to shift from predictions of further cedi decline, even with the recent influx of Eurobond dollars and expected receipt of Cocobod financing dollars through the agreed US$1.2 billion syndicated financing facility which should both increase dollar supply and thus reduce its relative price compared to the cedi.

 

On the inflation front, despite double-digit inflation and the impact of cedi depreciation on inflation due to relatively more expensive (in cedis) imports, the most recent release from the state Ghana Statistical Service (GSS) indicates that July producer price inflation has fallen by 0.5% in month-on-month terms and by 2% points on a year on year basis, to 5% for July 2013 compared to July 2012 (whereas the June producer price level was 7% higher than that in June 2012).

 

Although this may seem like positive news, further detail revealed by GSS statistician Dr Philomena Nyarko indicates that while manufacturing inflation rose from 10.6% to 10.9% (year-on-year), mining and quarrying inflation fell significantly into the sub-zero zone partly due to lower gold prices - a factor which (broader implications for Ghana's economy aside) is unlikely to cause sustained inflation relief.

 

For more news and expert analysis about Ghana, please see Ghana Politics & Security.

© 2013 Menas Associates

Ghana: Supreme Court conducts cross-examination of leading NDC and NPP counsel

 

Although the previously stated Supreme Court date of electoral judgement (29 August) is still expected to be met, the Court has subsequently cross-examined the leading counsel for both the NDC (Tsatsu Tsikata) and NPP (Philip Addison), as well as President Mahama's counsel (Tony Lithur) and counsel for the beleaguered Electoral Commission (James Quashi-Idun). This round of cross-examination was scheduled by the Court upon receipt of final written submissions from the respective electoral case parties, as described in the last issue of Ghana Politics & Security.

As may be expected, the Court reports indicate that all parties have maintained their final positions presented in their respective final submissions, with no major surprises or indications (as yet) of further delays. Indeed, the major Court event of the week appears to be the contempt judgement noted above for the NPP's general secretary which has no bearing on the major matter at hand.

 

The Court's conduct will, of course, come under further scrutiny once the result is announced, although the commendation of the Court last week by Ghana's "anti-corruption" organisation the Bureau for Internal Affairs, headed by Mohammed Frimpong, for the respective Justices' "estimable character" adds another voice to those who believe that the Court - despite the extensive length of proceedings in comparison with similar electoral cases elsewhere, including Kenya - has so far demonstrated competence and fairness in its proceedings.

 

For more news and expert analysis about Ghana, please see Ghana Politics & Security.

© 2013 Menas Associates

Cameroon: Pre-electoral battle surfaces as candidate lists are rejected

 

On 28 March, the Supreme Court, sitting in place of the Constitutional Council, will begin hearing complaints filed by several political parties, including the CPDM, who want to compete for the election. Their lists were rejected by Elections Cameroon (Elecam) which is in charge of organising elections in the country. A 20 March statement from Elecam announced that 23 of the lists of candidates contesting the senatorial election had been rejected while 17 were retained. Not all the parties whose lists were rejected decided to petition so the Constitutional Council will start examining 15 appeals and has ten days to rule on the cases.

Three of the eight parties that had initially entered the race were booted out and surprisingly, six of the CPDM lists were among those rejected for various reasons. Among other reasons, the exclusions were due to poor compilation of files or application for the ballot by several factions of some political parties.

For more news and expert analysis about Cameroon, please see Cameroon Politics & Security.

© 2013 Menas Associates