Africa has embarked on an ambitious economic drive with the implementation of the African Continental Free Trade (AfCFTA). In theory, it holds a lot of promises and is perhaps the single most important instrument on the continent since the establishment of the Organization of African Unity, now the African Union. With a combined GDP of over USD 3 trillion and a population of 1.3 billion, the potential for private sector businesses to increase cash flow generation and create value is irresistible. But these opportunities come with risk. Not to talk about covid-19 that has in itself made risk riskier. Africa has over 30 different currencies and without a harmonized payment system it could hamper regional trade.

1. Discuss the risks inherent in the foreign exchange activities surrounding the implementation of the AfCFTA (10 Marks)
2. Propose 5 implementable risk management techniques or solutions that the Ghanaian Private Sector can adopt as they take advantage of the AFCFTA (10 Marks)
3. Discuss what additional risks the AFCFTA presents to Ghanaian banks and how these would affect their capital management (5 Marks)

Question 14

Ghanas public debt is rising fueled by fiscal deficit and currency valuation effect driven also by the recent energy crisis, financial sector clean-up, and now covid-19. In an election year, the deficit tends to escalate given the monetization and commercialization of the countrys elections. You are required:

1. Discuss the risks associated with the rising public debt in Ghana and under each risk discuss key strategies that can be adopted to manage those risks (5 Marks)
2. Discuss the implications of the rising public debt for private sector competitiveness in the face of the implementation of the African Continental Free Trade Area (AfCFTA) (10 Marks)