Ghana targets investment-grade rating to unlock cheaper long-term financing
The government is pursuing an investment-grade credit rating as part of efforts to reduce borrowing costs, attract more investors and expand financing opportunities for businesses under its New Economy programme.
Ghana is striving to achieve an investment-grade credit rating in order to cut borrowing expenses, entice additional investors, and broaden financing prospects for businesses through its New Economy program. Finance Minister Dr. Cassiel Ato Forson stated that attaining this goal hinges on maintaining steady macroeconomic stability, executing dependable economic policies, and restoring investor confidence.
During a New Economy discourse in Accra, he elaborated that the 2022 debt default and subsequent Domestic Debt Exchange Programme (DDEP) had significantly compromised Ghana's domestic bond market and constrained local banks' access to international financing. While improvements in the nation's credit standing have somewhat restored access to external funding, Dr. Forson emphasized that reaching investment-grade status would unlock further opportunities by drawing in a more diverse array of investors.
He noted that with an investment-grade rating, Ghana would have established a solid foundation for corporate bonds and other financial instruments to flourish. This rating would serve as a stronger gauge of the country's capacity to fulfill its debt commitments, potentially qualifying Ghana for investments from institutions with constraints on the types of securities they can fund.
Dr. Forson anticipates that such a rating would expand the pool of available capital and potentially lower borrowing costs for both the state and private-sector entities. He highlighted that the improved sovereign credit profile would facilitate the conditions for Ghanaian enterprises to issue corporate bonds and secure long-term funding for their operations and expansion.
The New Economy program aims to reconstruct Ghana's economic fundamentals and confidence, bolstering the country's standing in global financial markets and stimulating private-sector investment.
Written by urgent.news from MyJoyOnline Ghana's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
