Accra, Ghana — Ghana’s Securities and Exchange Commission has instructed domestic fund managers to cut back on offshore holdings in an immediate bid to shore up the cedi and protect the country’s foreign-exchange reserves. Official statements indicate that yesterday’s directive limits how much local pension and mutual funds may place abroad, restricting new foreign purchases to markets that share information with Ghanaian regulators.
The circular contains no grace period and took effect on issuance.
The measure ties directly to the three — year International Monetary Fund program begun in May 2023, which requires stronger reserve buffers and tighter macroeconomic control. Fund documents note that outbound investment by local portfolios had reached roughly one-tenth of their $5 bn in assets, draining scarce dollars at a time when the cedi has lost more than half its value since 2022. Independent observers say the tighter rule should curb capital flight and ease pressure on the exchange rate, though asset managers warn that forced sales of overseas holdings could dry up liquidity at home.
The government stated in a communiqué that building reserves and stabilising the currency remain “central pillars” of its economic recovery plan. Sources close to the matter said officials expect the revised framework to improve debt-sustainability metrics tracked under the IMF facility. Market reaction is being watched for signs of tighter capital-account restrictions, which could colour foreign investors’ appetite for Ghana’s Eurobonds.
Further details are expected once the Securities and Exchange Commission releases the full text of the directive.
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Source: Africa.
*Additional reporting by ImNews | Sources consulted: 5*
