The Bank of Ghana has approved 15 commercial banks as primary dealers responsible for underwriting the government’s debt as part of efforts to tighten the country’s fixed-income trading amid a surge of investor demand in government’s treasury.

According to the Bank of Ghana, the move, which takes effect on Friday July 1, is part of wholesale changes that the central bank has made to strengthen the primary dealership system, facilitate the development of the fixed income market and create a favourable environment for private sector investors to make and realise their investment decisions.

Primary dealers are elite club of traders required to bid on a pro-rata share of every government’s treasury auction, and they also offer an important window into the market for regulators and policymakers since they are expected to meet state officials regularly to discuss funding needs, auction schedule changes and the interest-rate outlook.

It is understood the government will no longer pay brokerage fees to the dealers, who must now make their commissions from clients.

But for some banks being a primary dealer is a stamp of approval that helps in getting access to big ticket clients. But the benefits of committing to be a primary dealer have been tested in an era of cost cuts.

Analysts say a larger pool of dealers will benefit the central bank as it needs counterparties to mop up excess liquidity in the banking system.

Government for the third quarter of this year plans to raise about GHC16.8 billion to finance maturing debts and the primary dealers will be required to successfully connect buyers and sellers in the treasury market.