Ghana targets investment-grade rating to cut borrowing costs
By the AFREEQUE newsroom, based on MyJoyOnline
Ghana is seeking an investment-grade credit rating to reduce borrowing costs and widen access to financing. Finance Minister Cassiel Ato Forson links the goal to macroeconomic stability, credible policies and restored investor confidence, according to MyJoyOnline.
The Ghanaian government is seeking an investment-grade credit rating to widen the country’s access to capital and reduce borrowing costs for the state and companies. Finance Minister Cassiel Ato Forson said the goal would depend on sustained macroeconomic stability, credible economic policies and restoring investor confidence, reports MyJoyOnline.
According to Cassiel Ato Forson, Ghana’s 2022 default and the national debt exchange programme that followed severely weakened the domestic bond market and limited local banks’ access to international financing. The recent improvement in the sovereign rating has restored some access to external financing, he added.
The minister believes an investment-grade rating would attract investors whose mandates prevent them from buying securities that do not meet certain rating thresholds. He also says a stronger sovereign credit profile would create the conditions needed for the development of Ghanaian corporate bonds and for companies to access long-term financing for their activities and expansion.
The government is pursuing this objective under the New Economy programme, which aims to strengthen the economic fundamentals and confidence needed to improve Ghana’s position on international financial markets and stimulate private investment, according to MyJoyOnline.
