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ACCRA (Capital Markets in Africa) – Bank of Ghana Governor Abdul Nashiru Issahaku tendered his resignation after a year in the job and three months after the president who appointed him lost power.
Issahaku, 55, will leave the post for “personal reasons,” he said in a text message on Thursday. He was appointed governor in April by former PresidentJohn Dramani Mahama, whose National Democratic Congress lost the December election to the New Patriotic Party led by President Nana Akufo-Addo.
“We believe that it stems from the change in government,” Celeste Fauconnier, an analyst at FirstRand Ltd.’s Johannesburg-based Rand Merchant Bank, said in an emailed note to clients. “Another likely reason could be to appoint a governor that would be less cautious than Issahaku and more open to further and more aggressive rate cuts.”
The cedi fell as much as 0.9 percent and was trading 0.2 percent weaker at 4.345 against the dollar at 12:13 p.m. in the capital, Accra.
Issahaku could be replaced by Ernest Addison, a lead economist at the African Development Bank in Johannesburg, Accra-based radio stations Joy FM and Citi FM reported on their websites on Thursday, citing people they didn’t name. Addison, a former director of research at the central bank, didn’t immediately respond to an emailed request for comment.
“The incoming governor will want to reduce interest rates to drive the private sector, but at the same time he’ll not lose focus” on targeting inflation, Hamza Adam, head of treasury operations at Universal Merchant Bank in Accra, said by phone. Rate cuts “will depend on what the inflationary outlook looks like,” he said.
On March 27, Issahaku and his Monetary Policy Committee cut the benchmark interest rate for a second time in four months as the cedi recovered from record lows and inflation slowed to the lowest rate in more than three years. The November reduction was the first since May 2011. Inflation has slowed to 13.2 percent from 18.7 percent during Issahaku’s time as governor.
Gross domestic product in Ghana, the world’s largest cocoa producer after Ivory Coast, probably expanded 3.6 percent last year, according to government estimates, as a shutdown at oil and gas fields and power cuts weighed on the economy. That would be the slowest growth rate since 1994.