Bloomberg News

Ghana Companies Should Sell Bonds to Raise Money, Bank Says

October 20, 2011

(Updates with comment from Amissah-Arthur in third paragraph.)

Oct. 20 (Bloomberg) -- Ghanaian companies should sell bonds to raise money and reduce their dependence on loans, said Kwesi Amissah-Arthur, governor of the central bank of West Africa’s second-biggest economy.

Market conditions and the economic environment in the West African nation “are ripe” for companies to sell bonds, he told a conference in Accra, the capital, today.

Changes made by the Bank of Ghana to the primary-dealership bond market and extension of maturities on offer to five years from three years was in part to create an environment for a “corporate-bonds market to thrive,” he said.

The central bank in April introduced a minimum capital requirement of 5 million cedis ($3.1 million) for primary bond dealers, slashing the number of participating banks to 15 from more than 25 banks, Amissah-Arthur said.

Companies can sell bonds at lower costs as Ghana’s Treasury bill rate, which may be used as a benchmark indicator for corporate debt, has declined, he said.

Ghana’s three-month borrowing costs at the most recent auction, held on Oct. 14, dropped to 9.25 percent from 9.32 percent a week earlier, the third-straight decline, according to data compiled by Bloomberg.

The Volta River Authority, a state-owned electricity utility, plans to raise $400 million in bond offers over the next two years to fund power generation, Chief Executive Officer Kweku Awotwi said at the conference. The company needs double that amount to improve efficiency and boost electricity output, he said. “We will issue equity to investors in some few years to come.”

--Editors: Emily Bowers, Dulue Mbachu.

To contact reporter on this story: Moses Mozart Dzawu in Accra at

To contact the editor responsible for this story: Antony Sguazzin at

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