Efficient, timely debt restructuring key in rebuilding investor confidence – Jibran Qureishi

Head of Africa Region Economic Research at Standard Bank parent company of Stanbic Bank Ghana, Jibran Qureishi, has emphasized the importance of an efficient and timely debt restructuring in rebuilding investor confidence.

He said this is key in restoring macroeconomic balance and promoting inclusive and sustainable growth in Ghana.

Mr. Qureishi said this when he spoke on Financial Market Insights at the Stanbic Bank Global Market Client Session held at the Kempinski Hotel Gold Coast City Accra.

According to him, “We must understand the historical context leading to the need for debt restructuring and explore the root causes that led to it rather than diving straight into the technicalities. When I returned to Africa in 2012 the prevailing narrative was one of Africa rising, with the continent touted as the last frontier for economic growth and development.

“Africa was experiencing significant advancements, including the discovery of new oil reserves and substantial investments in the mining sector. Infrastructure projects were booming, and external capital became more accessible due to global economic responses after the 2007-2008 financial crisis.”

He continued that “However, a notable shift occurred around 2006-2007, when Africa’s investment needs surpassed its domestic savings. Rather than emphasizing the importance of boosting domestic savings, the focus turned towards external borrowing due to the affordability of the funds. This external capital was directed toward financing various investments on the continent, resulting in a substantial reliance on commercial borrowing.”

Mr. Qureishi further argued that the primary reason for the current debt restructuring challenges lies in this strategic shift. He said “African nations borrowed extensively for infrastructure investments, but many of these projects failed to yield the expected returns, with tax revenue growth also playing catch-up. Commercial debts with shorter repayment periods were taken on, and now, these debts are maturing while the investments struggle to generate sufficient returns. This situation is at the heart of the current debt restructuring issues faced by many African nations, including Ghana, which of course have been exacerbated the quick succession of external shocks since the 2020 pandemic, rise in geopolitical tensions and global monetary policy tightening.”

The Stanbic Bank Global Market Client Session is an executive platform for networking, discussing critical issues, and sharing insights on financial markets. The event was held under the theme, ‘Charting Ghana’s Markets: Building Resilience through Structured Solutions.’