This year is going to go into the Ghanaian financial history books as one of the most eventful years ever. For the first time government restructured domestic bonds, meaning it told holders of its cedi bonds that it could not honour its commitments and therefore gave them a different payment plan with lower interest rates and a revised maturity period. And then it restructured dollar-denominated bonds it had issued locally as well as short-term bills the state cocoa company (COCOBOD) had issued.

But there was more to come. The Bank of Ghana released it’s 2022 financial statements posting a loss of GH¢60.8 billion as a result of it writing off GH¢48.4 billion owed to it by the government. The magnitude of this loss is put into proper perspective when you realize that the average profits the BoG had been making was about GH¢1 billion a year. Thus it wiped off a theoretical 60 years’ worth of profit in one year. The loss has left the BoG with a GH¢55 billion hole in its balance sheet, meaning its liabilities exceed its assets by that amount.

Another interesting development was the government trying to reduce borrowing costs by rejecting high interest offers for treasury bills and holding a new auction where they accepted lower bids. By this measure the government was able to reduce t-bill rates from 35% to about 19% even with inflation hovering around 40%. By November though, the rate had accelerated to almost 30% even with inflation tumbling to 26.4% from a high of 53.6%. The positive spin on this for investors is that in November the t-bill rate was higher than inflation (see chart 1). This was a return to normalcy after inflation soared past the t-bill rate back in January 2022.

The final significant development we will briefly address is the approval of a $3 billion Extended Credit Facility to Ghana by the IMF. This approval came with a $600 million disbursement which was crucial to the central bank’s forex reserves. However, the second disbursement was held up by Ghana’s bilateral creditors being unable to reach a restructuring deal with the country before the end of November. This deal is a condition the IMF does not appear to be ready to compromise on before releasing any further funds to the country.

Now that we have addressed the significant developments, let’s look at how all stocks on the Ghana Stock Exchange (GSE) performed in 2023. And then we will place this year’s performance in proper perspective by looking at the trend of the last few years.

Equity	Share Price (GH¢)	December Returns	Full Year Returns
Benso Oil Palm Plantation Ltd	22	10.4%	187.6%
Total Petroleum Ghana Ltd	9	0.0%	125.0%
Unilever Ghana Limited	8.11	0.0%	109.0%
Guinness Ghana Breweries Ltd.	3.4	0.0%	65.9%
MTN Ghana Ltd	1.4	0.0%	59.1%
Societe Generale Ghana Limited	1.57	0.0%	57.0%
Intravenous Infusions (IIL)	0.05	25.0%	25.0%
Fan Milk Limited	3.25	7.6%	8.3%
Trust Bank Limited (THE GAMBIA)	0.82	0.0%	2.5%
NewGold Issuer Limited	218.5	0.0%	0.3%
Asante Gold Corp	8.89	0.0%	0.2%
AngloGold Ashanti Limited	0.41	0.0%	0.0%
Agricultural Development Bank	5.06	0.0%	0.0%
AngloGold Ashanti Limited	37	0.0%	0.0%
Aluworks LTD	0.1	0.0%	0.0%
Clydestone (Ghana) Limited	0.03	0.0%	0.0%
Camelot Ghana Ltd	0.1	0.0%	0.0%
Cocoa Processing Company	0.02	0.0%	0.0%
DASPHARMA	0.4	0.0%	0.0%
Digicut	0.09	0.0%	0.0%
Ecobank Transnational Incorporation	0.15	0.0%	0.0%
HORDS LTD	0.1	0.0%	0.0%
Mega African Capital Limited	5.38	0.0%	0.0%
Meridian-Marshalls Holdings	0.11	0.0%	0.0%
Produce Buying Company Ltd.	0.02	0.0%	0.0%
Samba Foods Ltd	0.55	0.0%	0.0%
Standard Chartered Bank Ghana Ltd – Preference Shares	0.9	0.0%	0.0%
Tullow Oil Plc	11.92	0.0%	0.0%
Republic Bank	0.48	-4.0%	-11.1%
Ghana Oil Company Limited	1.5	3.4%	-12.8%
Standard Chartered Bank Ghana Ltd.	17.55	0.0%	-12.9%
Ghana Commercial Bank Limited	3.4	-2.9%	-13.7%
Access Bank Ghana	3.4	0.0%	-15.2%
Ecobank Ghana Ltd	5.5	-21.4%	-17.2%
SIC Insurance Company Limited	0.24	0.0%	-22.6%
Enterprise Group Limited	2.39	-0.8%	-25.3%
CAL Bank Limited	0.48	-5.9%	-26.2%

As can be seen in Table 1, the best performer for the year was Benso Oil Palm Plantation (BOPP) whose stock price rose by 187% during the year. BOPP is a solid performer which also returned 15% last year when the GSE was down as a whole as well as a mind-boggling 233% in 2021. Total Petroleum’s share price rose by 125%, a welcome rebound from a 20% decline in 2022. The last of the triple-digit returners was Unilever Ghana with a healthy 109% return after a 34% decline last year. Other significant gainers were Guinness Ghana (+65.9%), MTN (+59.1%) and Societe Generale (+57%).

Overall stocks were up 28.08% in 2023 compared to a decline of 12.38% last year. Financial stocks however, were down 7.36% and you can see how they dominate the category of stocks whose prices declined this year. The losers in the financial sector were Republic bank (-11.1%), Standard Chartered (-12.9%), GCB Bank (-13.7%), Access Bank (-15.2%), Ecobank (-17.2%), SIC (-22.6%), Enterprise (-25.3%), and CAL Bank (-26.2%). It’s just all around a year to forget for financial stocks. But should the government meet all the terms of the new restructured bonds without a hitch, it is not out of the question that we will see a rebound next year.

So how do we put the stock returns in proper perspective? First we need to consider that 91-day t-bill rates averaged 26%, so stocks edged them out as an investment before we even consider that dividends mean that the stock returns were in reality larger than 28%. We also need to consider the inflation rate of 26.4% in November, which I expect to be lower in December, meaning that stocks returned a positive real return. The Ghana cedi also depreciated by 26% against the US dollar during the year, once again placing stocks as the superior investment this year.

We should also compare this year’s return to that of previous years for a more insightful picture. See Chart 2 below.

Chart 2 shows that 2023 is one out of only 4 years in the last 10 that the GSE has returned a positive return. This is a welcome performance given that the days when the GSE was a consistent performer are long gone. We will take this victory without pondering too much as we prepare for what promises to be another tough year.

I want to wish all readers of CediTalk a prosperous new year. Thank you for your support through 11 years of me covering Ghana’s economy, financial markets, and political risk. Should all plans come to fruition, next year you will see more regular updates on this blog to guide your investment decisions. Thank you.