- Ghana's central bank governor, Dr. Ernest Addison, delivered a positive outlook on the country's economic recovery
- The government has begun making good on its debts
- This new market is expected to improve the overall liquidity
Ghana’s central bank governor, Dr. Ernest Addison, delivered a positive outlook on the country’s economic recovery at the launch of the Commercial Paper Market in Accra.
Debt Repayments on Track
The government has begun making good on its debts, prioritizing those who opted out of the Domestic Debt Exchange Programme (DDEP) and certain institutional investors.
Additionally, they have fulfilled their obligations regarding interest payments on DDEP bonds.
Early Signs of Progress
Dr. Addison highlighted encouraging signs in the economy. Business confidence is rising, inflation is stable, and economic activity is picking up. The exchange rate has also remained stable, although recent challenges have emerged. The central bank assures it has sufficient reserves to address these fluctuations.
Boosting Lending to Private Sector
Despite positive indicators, credit flow from banks to businesses remains sluggish. To address this, the central bank has implemented a dynamic Cash Reserve Ratio (CRR) that adjusts based on a bank’s loan activity. This aims to incentivize banks to lend more and support private sector growth.
The Commercial Paper Market – A New Avenue for Investment
The launch of the Commercial Paper Market is another key initiative. It provides alternative investment opportunities for institutional investors like pension funds and insurance companies. This new market is expected to improve the overall liquidity and diversity of Ghana’s securities market.
Focus on Stability and Transparency
The central bank remains committed to enforcing regulations and upholding the integrity of the banking system. Recent sanctions on banks for violating foreign exchange laws serve as a reminder of this commitment. Stringent regulations will also govern the Commercial Paper Market, ensuring investor protection and market confidence.
Ghana’s 10-Year Capital Market Master Plan in Motion
Dr. Addison expressed optimism that the launch of the Commercial Paper Market marks a significant step towards achieving the goals outlined in Ghana’s 10-year Capital Market Master Plan. This plan aims to diversify the investment landscape and investor base in the country.
Overall, the Ghanaian government and central bank are taking steps to stabilize the economy and encourage growth. The Commercial Paper Market is a new tool intended to bridge the credit gap for businesses and create fresh investment opportunities.
