Govt Assesses Viability of Agencies to Issue Bonds

By Claude Nyarko Adams

The government is to undertake viability assessment of all state agencies to identify those that can issue agency bonds to finance capital expenditure and strategic investments.

According to the Senior Minister, Yaw Osafo Maafo, the Ghana Airports Company Limited, Ghana Ports and Harbours Authority among others, had already gone through the process and have qualified to issue such bonds.

Similarly, he said an appropriate capacity building and adequate legal framework for district and municipal assemblies were also in the offing to allow them borrow from the capital market to finance economically viable local projects to further development at the local level.

This, he explained, would result in not only the development of the local sovereign bond market but also a strong and viable municipal bond market in the country.

Mr Maafo was speaking in Accra on Wednesday at the opening of the 3rdCapital Market Conference of the Securities and Exchange Commission (SEC).

It was on the theme "Ghana Beyond Aid: The Role of the Capital Market".

In order to control expenditure, the Senior Minister noted that the government was currently developing a Fiscal Responsibility Act, as well as establishing the Fiscal Responsibility Council to create an enabling economic environment for bodies including the SEC to address challenges in the financial sector.

"As a country, going out of the International Monetary Fund (IMF) does not mean expenditure galore for government. We are working on a Fiscal Responsibility Act and a Fiscal Responsibility Council to ensure discipline in how we spend so that we do not run to the IMF today or in the future again," he stated.

As a key sector in the growth of the economy, Mr Maafo urged the SEC to develop innovative strategies for raising capital to support agriculture, which was presently poorly funded, to ensure its development.

He reiterated the need for a closer collaboration between relevant regulators of the banking, pensions, insurance and securities for information sharing to clamp down on all fraudulent schemes and develop a more integrated financial system to make credit and financial services easily accessible and cheaper.

In the meantime, the Senior Minister said that the government was in the process of passing a law on the management of all Stated Owned Enterprises (SOEs) for effective supervision to put the entities on the path of profit making.

Chairman of the SEC Board, Dr Yeboa Amoa, said the conference was designed to engage in policy discourse and performance evaluation of the SEC, policy makers and all other stakeholders who contributed to the development of the capital market as a mainstay in Ghana's economic development.

For the country to attract capital inflows to pursue industrialisation and infrastructure development, he called for the right policy mix to be implemented to remove the syndrome of investor uncertainty which made them risk-averse to long-term securities.

Within the past few years, he said the SEC developed the legal and regulatory framework for the establishment and operationalisation of the Ghana Alternative Exchange (GAX), and recently the Ghana Commodities Exchange (GCX) as an alternative capital raising and trading platform for Small and Medium Scale Enterprises (SOEs) and agricultural goods marketing platform for farmers respectively.

Currently, it was finalising a framework to address the advent of new asset class dedicated to the real estate and housing sector to promote investment and mortgage finance in the housing sector, Dr Amoa added.

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