The Ghana Stock Exchange (GSE) has initiated proactive measures to invigorate the commercial paper markets, with the goal of strengthening the nation’s financial sector.
This initiative underscores a deliberate transition towards promoting the trading of short-term debt instruments, representing a noteworthy advancement in Ghana’s financial domain.
In a conversation with CNBC Africa regarding the rise of Ghana’s commercial paper market, Oforiwaa Attipoe, the Global Market Sales Representative for Ghana at Standard Bank, underscored the significance of commercial papers in expanding investment options amidst ongoing economic restructuring endeavors.
She mentioned that “Ghana’s capital market, previously characterised by low liquidity and minimal regulation, now offers corporates a platform to access short-term financing at relatively lower rates compared to traditional bank loans. Moving forward, the performance of Ghana’s Debt Capital Markets in the second quarter will hinge on various factors, including the success of the commercial paper market, currency stability, and inflation trends.”
Recent market trends continue to demonstrate significant oversubscription of treasury bills, signaling investors’ trust in the government’s financial instruments.
Attipoe emphasized the government of Ghana’s utilization of treasury bills as a primary means to generate funds, particularly to mitigate budget deficits and fulfill existing debt obligations.
In relation to inflation, recent data from Ghana illustrates a considerable downward trajectory, offering insight into the country’s economic outlook in the foreseeable future.
Attipoe explained that “April witnessed a drop in inflation to 25%, down from March’s 25.8%. This decline aligns with earlier predictions by economic analysts, who forecasted a gradual decrease to around 15-16% by year-end. Factors contributing to this trend include favorable base effects from the previous year and a continuous downtrend in food prices. Data released by the Ghana Statistical Services revealed a significant decrease in food basket inflation, attributing it to a 2.1% drop, indicating a positive year-on-year movement.”
Nonetheless, certain components of the inflation index, including housing and utilities, excluding petroleum prices, witnessed an upward trend.
Attipoe highlighted that currency fluctuations played a role in these increases, but stressed that food prices remained a significant factor, constituting approximately 45% of the total inflation figure.
In general, Ghana’s evolving financial environment demonstrates a deliberate push to stimulate economic expansion and bolster investor trust in the face of existing challenges. Through strategic measures such as the enhancement of commercial paper markets and careful fiscal strategies, the nation is striving to navigate towards economic revitalization and enduring economic growth.