Ghana will recruit more banks to market its domestic bonds as the West African nation seeks to boost demand and lower borrowing costs.
Currently, five financial institutions, known as book runners, arrange and price the country’s medium-term domestic debt. That will be expanded to a new structure known as the bond market specialist group, Deputy Minister of Finance Charles Adu Boahen said in response to Bloomberg’s questions. There will be incentives to lift demand and attract foreign investors.
The government is trying to arrest a decline in demand for Ghana’s debt from foreigners. Bond purchases by non-residents dropped to 48% in 2018, from 70% the previous year, according to central-bank data.
In January, the share dropped to just 6.3%, according to data from the Central Securities Depository Ghana Ltd.
The revamp will bring to an end a process started in 2015 to lessen the central bank’s role in auctioning government bonds. The average weighted borrowing cost on government cedi debt declined to 16.5% last year from 17.4% in 2017, according to the Ministry of Finance.