Bloomberg News

Morgan Stanley Strengthens Ghana Cedi Outlook on Oil Exports

January 16, 2012

(Updates with comment from analysts in third paragraph.)

Jan. 16 (Bloomberg) -- Morgan Stanley revised its forecast for Ghana’s currency, projecting a stronger rate of 1.85 per dollar by the end of the year on speculation that oil exports will increase.

The cedi, which has weakened 4 percent against the U.S. currency this year, was projected at 2 cedis per dollar last month, according to Michael Kafe and Andrea Masia, Johannesburg- based research analysts. The cedi gained for the first time in four days, trading 0.6 percent higher at 1.7080 by 10:48 a.m. in Accra.

A decision by companies operating in Ghana’s Jubilee oil field, including U.K.-based Tullow Oil Plc, to purchase the previously leased floating production, storage and offloading vessel used at the site, “points to some optimism with regards to their perceived ability to source ready markets for the country’s oil exports,” according to Kafe and Masia. “This has led us to temper our pessimism with regards to oil export volumes,” they said.

The vessel was bought from Modec Inc., Thomas Manu, an official at the state-owned Ghana National Petroleum Corp., which also holds a stake in the Jubilee site, said by phone Jan. 6. Daily oil output is expected to rise to 120,000 barrels “between February and May” from the rate of 85,000 barrels at the end of 2011, according to Morgan Stanley.

Morgan Stanley lowered its forecast for Ghana’s 2012 current account deficit to 6.8 percent of gross domestic product from 7.5 percent seen last month and cut its inflation projection to 11.1 percent from 11.5 percent. An outlook for economic growth of 8.5 percent was maintained, according to the analysts.

--Editors: Emily Bowers, Peter Branton

To contact the reporter on this story: Moses Mozart Dzawu in Accra at

To contact the editor responsible for this story: Emily Bowers at

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