Ghana sets eyes on long-term bonds to consolidate middle-income status

Ghana’s Finance Minister Seth Terkper says it is prudent to finance the capital component of the national budget with long-term bonds as the country consolidates its middle-income status.

According to the Finance Minister, it is important for the country to develop its local capital market more especially to mobilize funds to finance the infrastructural gaps which constrains the development efforts of Ghana.

“……the wide infrastructural gaps which constrains our developments efforts as a country can only be closed when we tap into long-term financing options such as the capital markets, both domestic and foreign,” Mr Terkper said last week when Ghana officially listed the second Eurobond on the local bourse in Accra.

“Furthermore, as we consolidate our middle-income status, it will be prudent to finance the capital component of the budget with long-term bonds,” he added.

According to the African Development Bank‘s Financial Markets Initiative, Africa as a whole requires about $20 billion in infrastructure investment per year which can only be sustainably financed through long-term bonds.

In Ghana alone, Mr Terkper says “our estimation is that the required financing gap is about $1.2 billion a year”.

Mr Terkper argues that a well-developed local bond market is critical in Government’s ability to mobilize the necessary funds to support capital expenditures.

He added that such markets are necessary for enhanced financial stability and better integration in the global financial landscape.

By Ekow Quandzie