Market News

By Moses Mozart Dzawu and Anthony Osae-Brown

(Bloomberg) -- Ghana’s benchmark stock index, Africa’s best performer last year, is set to extend gains in 2025 as investors bet incoming President John Mahama government will restore economic stability.

The Ghana Stock Exchange Composite Index rose 56% in local-currency terms — the most since 2013 — aided by a $3 billion International Monetary Fund bailout that’s expected to support growth this year. An economic recovery in Ghana may lure investors again this year, according to Nana Kofi Agyeman Gyamfi, head of wealth management at Bora Capital Advisors Ltd.

Ghana’s gross domestic product expanded an average 6.3% in the first nine months of 2024, compared with 2.6% a year earlier. Mahama was elected last month after pledging measures to restore Ghana’s status as the region’s second-biggest economy.

“The worst is behind us,” said Alex Boahen, head of research at Accra-based Databank Group, which manages about $1 billion in assets. “We expect the general confidence to improve in tandem with the improvement in the economy,” he said, predicting that the Ghanaian index will gain 45% in 2025.

Optimism about the outlook for other key countries in the region, including Ivory Coast and Nigeria, helped buoy their stock markets last year.

In neighboring Ivory Coast, the BRVM Composite Share Index that groups companies from the eight-member West African Economic and Monetary Union, advanced 29% in 2024, the biggest jump in three years. The IMF in April agreed to lend $3.5 billion to the world’s biggest producer of cocoa.

The fund forecasts Ivory Coast’s economy will expand 6.4% in 2025, paced by record cocoa prices and the start of new oil and mining projects by companies including Eni SpA and Vancouver-based Montage Gold Corp. About 74% of the 47 companies listed on the regional bourse are Ivorian. 

In addition, banks have started lending again in Ivory Coast and Senegal, said Famara Ndiaye, a fund manager at Abco Bourse in Dakar, the capital of Senegal. That indicates an economic recovery, he said. 

In Nigeria, the benchmark stock index gained 38%, helped by President Bola Tinubu’s move to allow the nation’s currency to trade freely, end fuel subsidies and government control of tariffs set by power firms.

Oando Plc surged sixfold after completing the purchase of Rome-based Eni’s wholly owned subsidiary, which focuses on onshore oil and gas exploration and production, as well as power generation. Seplat Energy Plc, which concluded the acquisition of the assets of Exxon Mobil Corp., jumped 147%. 

Still, Nigeria faces an ongoing cost-of-living crisis, which may dampen investor sentiment. Inflation accelerating at the fastest pace in almost three decades last year triggered riots and stampedes in Africa’s most-populous nation. 

In Ghana, the cedi currency has risen 7.6% in the past three months. Further gains may help control imported inflation, bolstering Mahama’s new government, which takes over on Jan 7.

The country’s IMF program and a revival in economic activity will give business a “lift up,” said Bora Capital’s Gyamfi, who manages $408 million of assets. “We expect the cedi to consolidate gains and the government to continue fiscal consolidation under the IMF program.”

The Ghanaian stock exchange’s performance last year was second to the Cyprus Stock Exchange General Index, which climbed 58% in 2024.

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--With assistance from Kamailoudini Tagba.