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Business News of Wednesday, 30 June 2021


Trade Ministry backs proposal to license local credit rating agencies

The Trade Ministry has welcomed move to  to license domestic credit rating agencies by SEC The Trade Ministry has welcomed move to to license domestic credit rating agencies by SEC

A Technical Advisor to the Minister of Trade and Industry (MoTI), Anthony Nyame-Baafi, has welcomed the move to license domestic credit rating agencies by the Securities and Exchange Commission (SEC).

“The proposal to establish a domestic credit agency to assist firms with access to capital and implement the Ghana Stock Exchange (GSE) market initiative will help attract capital to Ghanaian businesses,” he told industry players at a trade forum in Accra.

SEC has already issued draft regulations to facilitate and standardise the establishment and operation of credit rating agencies in the country.

Mr. Nyame-Baafi said since 2017 the government has implemented a lot of policies aimed at improving access to finance as well as reduce the cost of credit.

These, he said, include the financial stimulus package for local industries, which is being implemented with the support of participating financial institutions in the country.

“The Ministry of Trade and Industry will collaborate with other relevant institutions and organisations to conduct a review of the regulation of export finance institutions to enable them establish a special financing window for products for strategic sectors and special programmes such as 1D1F,” he added.

He said Ghana’s monetary policy rate, which is an important benchmark for pricing lending rates, stands at 13.5 percent compared to 3.5 percent in South Africa, 4 percent in Côte d’Ivoire, 7 percent in Kenya, and 11.8 percent in Nigeria.

“Financing for export has therefore become an important issue that requires immediate collective attention if the Ghanaian private sector can harness the benefit of export to the preferential market.”

Mr. Nyame-Baafi stated that Ghana’s exports to the rest of Africa vis-à-vis its imports for the past 10 years have been very positive, adding that the gap has widened.

Overall exports have also enjoyed continued growth, he added, with the current industrialisation effort providing an opportunity for Ghana to promote value-added duty-free export to the United States market under the African Growth and Opportunity Act (AGOA), the European Union market under the Economic Partnership Agreement, the United Kingdom market under the UK-Ghana Partnership Agreement, as well as the Africa market under the African Continental Free Trade Area (AfCFTA) agreement.

The country’s exports are dominated by traditional products such as gold, petroleum oil, cocoa beans and wood products, which, according to Mr. Nyame-Baah, collectively account for 96 percent of the total exports of the country.

Non-traditional exports include fruits, cashew nuts, processed cocoa, aluminium, and iron and steel products.