The International Finance Corporation (IFC) has got the permission of the Ghana Stock Exchange (GSE) and the Securities and Exchange Commission (SEC) to regularly issue cedi-denominated bonds on the market.
Such bonds, the first of their kind by an international institution on the Accra bourse, will add to the government and corporate bonds currently under trade.
Although details of the issues are yet to be announced, a statement from the IFC, a member of the World Bank Group, said proceeds of the bonds would be used to fund development projects in the country.
The bonds are to be issued under the IFC’s Pan-African Domestic Medium-Term Note Programme, the statement added.
The Director General of SEC, Mr Adu Anane Antwi, told the Daily Graphic that the development “adds to the credibility of the Ghana market,” especially in the eyes of the international investor community.
“Once IFC starts issuing its bonds, then all the other institutions that issue bonds will begin to look at Ghana as a possible market and that is good for us,” he said in an interview.
Mr Antwi, however, added that the commission was yet to receive a prospectus from IFC detailing when the first issue would be done, how much it would be worth and the duration of the first issue.
IFC is a development finance institution (DFI) that often uses foreign-sourced funds to lend to the government, as well as invest in the private sector.
Its latest move is, however, intended to enable it to raise the funds locally on the GSE from both local and foreign investors, especially the country’s pension fund managers.
The Deputy Managing Director of the GSE, Mr Ekow Afedzie, said in a separate interview that the corporation’s latest decision was laudable and the exchange anticipated that other DFIs would take a cue from it.
“IFC is a top-rated institution and them starting to issue bonds on our market might set the pace for others to come,” he said.
Mr Afedzi was also optimistic the initiative would help develop the local capital market, by attracting more investment instruments, like bonds.
IFC’s Pan-African Domestic Medium-Term Note Programme was launched last year and is now being implemented in seven African countries.
By Maxwell Adombila Akalaare/Graphic Business/Ghana
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