Gov't Plans Bond Market After Economy Stabilizes

Aug. 5 (Bloomberg) -- Ghana’s central bank plans to “implement measures” to develop a bond market after slowing inflation and a stabilized exchange rate bolstered the West African nation’s economy, Governor Kwesi Amissah-Arthur said.

“As a market for long-term savings, the bond market in Ghana can only develop in the context of macroeconomic stability,” he told a conference in the capital, Accra, today.

The Bank of Ghana would help strengthen trading infrastructure and improve regulations in the sector, he said.

Consumer-price inflation has slowed from a five-year high of 20.7 percent in June 2009 to 9.5 percent a year later, the Ghana Statistical Service said July 14.

Price-growth eased after Ghana’s cedi, which fell 15 percent against the U.S. dollar in the first half of 2009, gained 3 percent over the past 12 months.

Bonds would be traded on the Ghana Stock Exchange, which is expected to finish work on an automated bond-trading platform by the end of the year, Ekow Afedzie, deputy managing director of the exchange, said in a phone interview today. He didn’t say when trading would begin.

Currently only Ghana government debt and a corporate bond issued by Accra-based HFC Bank Ltd. are listed on the exchange and trades are done over-the-counter, Afedzie said. The Accra bourse automated trading of stocks in March 2009.

A developed market would allow the government to issue more long-term securities and raise funds for infrastructure projects such as railroads, Alex Yao Tetteh, acting director of the Finance Ministry’s aid and debt division, told the conference.

“If we are able to extend the boundaries of the bond market we will be able to develop long term instruments to push our countries ahead,” he said. Securities from other West African governments could also be traded on the Ghana exchange, Tetteh said.