Ghana is 5th on investors watch list next year

Ghana is among 10 African markets to watch come 2020 as far as real return on investments is concerned.

Africa is a “land of opportunity” and could be one of the main beneficiaries if the US and China make more progress on trade talks, said Bank of America strategists including London-based David Hauner.

But investors face plenty of potential risks in 2020. South Africa could lose its last investment-grade rating, Ghana’s government might ramp up spending ahead of elections, Zambia’s debt crisis could spiral out of control and Nigeria may be forced to devalue its currency.

Here are what to watch for in 10 key markets:

South Africa

Portfolio investors have exited South Africa this year, pulling a net $10bn from its stock and local-bond markets, according to data from the Johannesburg Stock Exchange. They’ve been concerned by the deepening crisis at state-owned power company Eskom, which can’t service its R450bn of debts without government support, and the increasing chance that Moody’s Investors Service will cut South Africa’s final investment-grade rating to junk.

But if President Cyril Ramaphosa makes headway in reforming Eskom, investors will probably be quick to come back. Bank of America and Goldman Sachs both say its inflation-adjusted bond yields are attractive and the central bank has room to cut interest rates.


Africa’s second-biggest oil producer is still reeling from a crash in crude prices five years ago. The economy will contract for a fourth straight year in 2019, the International Monetary Fund said this week. Still, investors have been impressed by the central bank’s reforms, including the devaluation of the kwanza.

Its fall of 32% this year against the dollar – only Argentina’s peso has weakened more – has increased inflationary pressure. But it’s also eased a shortage of foreign exchange that was crippling businesses.


Egypt remains a favorite among portfolio investors. Carry traders, attracted by yields of around 14% on pound bonds, have flocked to the Arab nation. The currency has rallied 12% this year, its best performance in at least 25 years – and Societe Generale SA forecasts it will gain another 4.5% to 15.35 per dollar in 2020.

But the reforms of President Abdel-Fattah El-Sisi are yet to translate into the foreign direct investment and jobs that Egypt badly needs. Aware of that, investors will watch to see if there’s any repeat of the anti-government protests in September that briefly rocked local markets.


The Horn-of-Africa nation remains one of the fastest-growing economies in the world. But that masks deep problems: inflation has accelerated to more than 20% and shortages of foreign exchange are acute. Prime Minister Abiy Ahmed, this year’s Nobel Peace Prize winner, recently turned to the IMF for a $2.9bn, three-year loan.

Investors welcomed the move, which should speed up plans to open up and modernise the state-controlled economy. The central bank has already started to weaken the overvalued birr, which had been largely pegged to the dollar. “This IMF deal is one of the biggest ideological shifts I’ve seen in Africa this decade,” said Charlie Robertson, Renaissance Capital’s London-based chief economist.


West Africa’s second-biggest economy holds general elections in late 2020, with President Nana Akufo-Addo probably seeking a second term. The country has a history of fiscal profligacy in the run-up to polls and investors will watch whether the government is more cautious this time.