Bloomberg/Ty Wright

Economy

Ghana plans to hire more banks for debt sales as foreign demand fades

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Currently, five book runners, arrange and price the country’s medium-term domestic debt.

Sunday 19, May 2019

(Bloomberg) --Ghana will recruit more banks to market its domestic bonds as the West African nation seeks to boost demand and lower borrowing costs.

Charles Adu Boahen, Ghana’s Deputy Minister of Finance, said that the number will be expanded to a new structure known as the bond market specialist group, adding that there will be incentives to lift demand and attract foreign investors.

The government is trying to curb a decline in demand for Ghana’s debt from foreigners. According to central-bank data, bond purchases by non-residents dropped to 48 per cent in 2018 from 70 per cent the previous year.

In January, the share dropped to just 6.3 per cent, according to the Central Securities Depository Ghana. The amount of debt sold through the book-build system fell to GHC 7.9 billion ($1.5 billion) in 2018 from GHC 15.7 billion the year before.

“The objective is to provide more competition and efficiency, the group will be under much stricter rules and obligations,” Boahen said

The revamp will bring to an end a process started in 2015 to lessen the central bank’s role in auctioning government bonds.

TAGS : Central Securities Depository Ghana, Cedi, debt sale

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