New Economy to push Ghana towards investment grade – Dr. Ato Forson
This is to lower the country’s borrowing costs and help Ghanaian businesses raise long-term financing, Finance Minister Dr. Cassiel Ato Forson has said.
Ghana aims to utilize its New Economy program to attain an investment-grade credit rating, according to Finance Minister Dr. Cassiel Ato Forson. This endeavor is anticipated to reduce Ghana's borrowing expenses and facilitate the nation's businesses in procuring long-term financing. Dr. Forson highlighted during a New Economy engagement in Accra that Ghana's domestic bond market had largely stagnated in 2022.
He further explained that local banks lost access to credit lines following the country's debt default and the Domestic Debt Exchange Programme. "Now we have restored it and the country is now rated B," he added. "We want to get to investment grade."
An investment-grade rating denotes that a credit rating agency perceives a lower risk of default. This could potentially render Ghana's government bonds accessible to more institutional investors, including funds that mandate a minimum credit rating. A broader investor base could assist Ghana in borrowing at reduced interest rates.
The benefits could furthermore extend to Ghanaian businesses. A bolstered sovereign rating could enhance financing conditions for enterprises and contribute to the deepening of the domestic corporate bond market. This, in turn, would grant businesses greater flexibility to raise long-term funds from investors for equipment acquisition, production expansion, and financing of new projects.
Dr. Forson emphasized that attaining investment grade would necessitate maintaining a stable and predictable economy and demonstrating the presence of policies capable of sustaining those accomplishments.
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