For a few years now, a group of us have tried to explain that the biggest challenge in African democracies like Ghana, Nigeria, and Kenya is not really the POLITICS. The real mess is in POLICY. We call this KATANOMICS. But we have done most of our explaining using essays. Everyone tells us, however, that reading nowadays is hard! People are too swamped and busy. So, we are trying our hands at using videos and photos. 😊 First video: youtu.be/cj9pUzTr2vQ We are new to this so forgive the quality and focus on the message. But we are very welcome to all feedback. Keep them coming.

1. Ghana's Finance Minister says now that the government has delivered on stability, growth for jobs is next. 2. The latest IMF numbers look, at first glance, to give strong encouragement to his position. But, as always, there is nuance, and the Devil is in the Detail. 3. The IMF's October Statistical Appendix has a table featuring 43 countries with forecasts for both 2026 and 2027. 4. This is the same stable of reporting generating headlines about Ghana overtaking Ethiopia as Africa's 8th largest economy. 5. Sadly, most secondary reporting of the IMF data focuses on static snapshots instead of the projections and forecasts the same data enables. 6. Ghana's 5.7% projected growth in 2026 and 5.2% in 2027 does indeed beat the sub-Saharan average of 4.5% for both years. 7. Small twist: West Africa's growth rate in 2026 is projected to be 5.3% and 5.2% in 2027, significantly higher than the sub-Saharan Africa average. Neighbourhood effect? Or Naija effect (check the PPP-weighted line in the attached)? 8. Hence why Ghana's top-10 status in sub-Saharan Africa puts it near the top 20% whilst its top-5 status in West Africa drops it out of the sub-region's top 20%. 9. Also, its IMF growth trajectory of 6% in 2025 to 5.7% in 2026 to 5.2% in 2027 suggests convergence with the sub-Saharan African mean but lower than the West African mean in 2028 (5.6% in 2028 for W/Africa vs 5% for Ghana). Downhill slope? 10. (Mauritania is outside the IMF's subregional classification and has to be imputed directly.) 11. Still, the October outlook is more favourable to Ghana than the April outlook, when IMF projected 4.8% for 2026 & 4.9% for 2027, compared with Oct's 5.7% & 5.2%. 12. Ghana is indeed projected to be Africa’s eighth-largest economy in 2026, at $128.64 billion, narrowly ahead of Ethiopia’s $127.15 billion. This is partly due to currency effects, as the GDP measure is in current USD. 13. Only that the same IMF projections put Ethiopia back ahead in 2027 and keep it ahead through 2031. Ghana’s lead over Ethiopia (and its eighth-place ranking) therefore lasts for 2026 only in this forecast. 14. Still good reason for Ghana's economic managers to celebrate. 15. The slightly more concerning issue is that DR Congo passes Ghana in 2028: $139.07 billion against $136.49 billion. Côte d’Ivoire passes Ghana in 2031: $166.81 billion against $164.26 billion. 16. One very useful way to interpret a part of this cross-trend is to distinguish how much an economy produces from what that production is worth when converted into (current) dollars. 17. Dollar GDP depends on three things: real production, domestic prices and the exchange rate used for conversion. The striking finding is that between 2024 & 2026, Ethiopia’s real output grows by about 19.2%, compared with Ghana’s 12.0%. Yet Ethiopia’s dollar GDP falls while Ghana’s rises. Hence why Ghana's top-8 status doesn't last. 18. Now you know why amidst the champagne-popping, the Finance Minister still said that Ghana will OUTPERFORM the IMF's projections.

No one in their right senses bets against Alhaji Aliko Dangote. But for sheer love of modelling, we are going to do just that! Well, only on one small matter: his prediction of 10 million unique subscribers buying into the IPO of his giant Lagos refinery, which was extended from closing today to 27th Oct. Our unproven model suggests that it would be hard to get past 2.8 million unique, valid retail subscribers, with an 80% range of 2.1 - 4.4 million. That would still be roughly twenty times Nigeria's previous retail record (MTN Nigeria's 126,720 in 2022), a little over half of Saudi Aramco's 5.06 million, but well under a third of the 10 million Dangote is expecting. - Chance of matching Aramco (4.9m real people): about 5%. - Chance of 10 million real, unique Nigerian and African subscribers: effectively nil in this model. - Chance that a headline of 10 million or more is announced anyway: very high. (And this is where the fun part is!) The IPO managers may have a trick up their sleeve (wink). The 10 million subscriber count can be reached by counting applications rather than people, or by counting pension contributors whose funds bought shares. How do we know that? MTN did the latter in 2022, turning 126,720 retail buyers into "6.6 million *indirect* Nigerian shareholders". Using that approach, it should be very easy for Dangote to break even the “10 million subscribers” threshold without breaking a sweat, just by adding "indirect". The offer will almost certainly be oversubscribed by value, but that has little to do with mass participation. Nigerian Pension funds (₦31.3 trillion in assets, with a regulatory waiver to buy), a $400 million pan-African SPV, and high-net-worth investors can fill ₦2.15 trillion on their own. On valuation, the ₦525 IPO share price asks buyers to assume that todays war-inflated margins become normal. As many analysts have pointed out, the price needs a through-cycle gross refining margin of $28 - 34 a barrel (about $32 in the central case) on a refinery doubled to 1.4 million barrels a day. The company's 2026 guidance is $24.2. At that guidance, fair value is closer to ₦310 - 450 a share, depending on discount rate and cost assumptions. But none of this kinda math really matters when it comes to the IPO demand. The real issues are disposable income, national levels of financial literacy, trust in capital markets, and various hygiene factors. The Aramco IPO was the world’s largest recent IPO on subscriber numbers. Unsurprisingly, it is the one Alhaji, ever the impossibility transcender, wants to beat. Unfortunately, Aramco is the wrong yardstick. It is true that every Dangote IPO design choice has aimed at maximising headcount rather than capital (only 3.3% of the enlarged company is on offer). $4 minimum ticket, 55 approved e-channels, no upfront CSCS account, bonus shares and a promise of priority for small investors, etc. All this rewards breadth. But there are gaps. Aramco's 5 million+ subscribers were produced by a rich state with a mass-retail market, bank credit and political pressure. Dangote does have a populous market, but it is not captive enough. Nor is there any equivalent of Tadawul’s decades of mass retail trading in Nigeria. Of the 6 million CSCS accounts in Nigeria, about 10% are active. Unlike in Saudi, Nigerian banks aren’t lending into the frenzy either. At any rate, outside India, I struggle to find a retail play that has drawn more than 6 million people. Yes, Safaricom hit 4.5% of the Kenyan adult population so 8% of Nigeria’s for Dangote shouldn’t be too crazy. Except that you are not considering the economic pressures in today’s Nigeria. Moreover, “mass equity ownership” is built over years. One mega-offer however magical its issuer can only climb so much of the distance. Britain went from 3 million individual shareholders in 1979 to 8 million in 1987 through a string of privatisations. Like I said at the very start, no sane person bets against the Alhaji, but he is asking the system to do several years of onboarding in four weeks. Hence my reckless wager. Wish me luck!

1. Is Ghana out of the fiscal woods yet? 2. The exchange rate, inflation, policy rate, government borrowing costs, all seem to be pointing the right way. 3. Yet, banks are threatening to block new loans to government workers because the controller/accountant-general deducts loan payments from pay and holds on to them rather than remit to the banks. 4. Public sector workers feel hard done by. 5. Contractors, licensed cocoa buyers, and the "coalition of unpaid nurses" and "unpaid teachers from colleges of education" have been protesting for much of 2025 and 2026 about months-old ARREARS. 6. Howzat? 7. Is there a cashflow problem or not? 8. One answer sounds like "fiscal austerity". Government has more fiscal leeway than ever, they say, but it is being extremely prudent so that the country doesn't skid off the fiscal rails. 9. Finance Ministry mandarins talk about massive restraint on the debt markets, for instance. 10. Well, analysts are pointing to a pattern that suggests that this neat story isn't that simple. 11. We all remember DDEP. Most of us by way of trauma. After the government declared itself bankrupt in 2022, its long-term bonds were restructured. 12. For most casual observers of the fiscal scene, the pain of DDEP has led to government having to rely on short-term treasury bills and a recent bond issuance wasn't too encouraging. 13. The truth, like I hinted, is more complicated. Between October 2025 and June 2026, the government issued about GH¢32.9 billion of domestic bonds. That is almost $3 billion. 14. Yet, only GH¢2.7bn (~$240 million), i.e. the lackluster showcase seven-year bond in April, went through the publicised sale. 15. Roughly GH¢25bn (~$2.2 billion) came from "taps" of the old restructured bonds, i.e. the DDEP bonds. There was no public individual notice for these issuances that the average investor would have seen. Another GH¢5bn went straight to the Bank of Ghana. 16. The Finance Ministry's bulletin calls the April sale the first issuance since the 2023 debt exchange, yet its tables show about GH¢22bn having been issued quietly in the preceding six months by "tapping" (i.e. reopening and selling) the old bonds and pacifying the Bank of Ghana with a "recapitalisation" bond. 17. Priced at the market yields of the time, the taps cost about 14.2 per cent (model-inferred), against 12.5 and 12.0 per cent on the advertised deals. That is to say those investors who got approached to buy got a better deal than those who bought into the more open and transparent April deal. Or the taps were placed nearer face value and someone else absorbed the loss. How to know? 18. The state took on roughly GH¢25bn of debt for about GH¢20bn in cash, a gap of around GH¢5bn, plus GH¢1.9 - 2.4bn in extra interest over the bonds' life. These are inferred estimates. 19. Of course, parallel pricing of state/public debt is now becoming familiar in Ghana. On 25 September, the Treasury paid 4.68 per cent on three-month bills, while the central bank paid 10.50 per cent on two-week bills a few days later. That week, the central bank borrowed about GH¢24bn and the Treasury about GH¢2.9bn. 20. The central bank's interest bill on these operations doubled to GH¢16.73bn in 2025. That GH¢8.1bn rise almost cancels the GH¢8.8bn of "savings" the Treasury claimed from its acclaimed "tight management" of fiscal policy. 21. Basically, similar to the effect we pointed out in 2024 when the government started issuing undercover bonds and selling on juicier terms to a select few investors, ordinary savers forced to rely on treasury bills are earning far less than rich institutions with access to these mouth-watering government debt products. 22. Howzat?