Ghana in fresh bid to develop corporate bond market
By Tosin Sulaiman
LONDON (Reuters) – Ghana is making a fresh bid to develop a corporate bond market and aims to achieve five listings in the next three years, an adviser to a new government bond development panel told Reuters on Thursday.
Ghana’s bond market is dominated by short-term government securities and Finance Minister Kwabena Duffuor said last November long-term funding was needed to drive investment in the world’s second biggest cocoa grower and Africa’s newest oil producer.
Only one corporate bond, issued by HFC Bank, is listed on the Ghana stock exchange.
Regulators say the absence of credit rating agencies and companies’ reliance on bank loans have stalled corporate bond issuance.
The National Bond Market Committee will work with state-owned enterprises and the private sector to encourage them to issue bonds, said Sam Mensah, a technical adviser to the panel.
Mensah said plans for corporate bonds drawn up a decade ago had not been fully implemented but the new panel would “go beyond writing reports.”
He said para-statal energy and port groups would be the strongest candidates because they had huge borrowing needs.
Companies have traditionally relied on bank loans and the tougher requirements for issuing bonds have been a deterrent, Adu Anane Antwi, director general of the Securities and Exchange Commission, told Reuters in an interview in Accra last month.
“It will take time before people will buy into the idea of coming to the market,” Antwi said.
“People are going to look at how you’re operating your business, corporate governance issues, disclosure issues, transparency.”