To Maintain a Functioning T-Bills Market, Gradual Resumption of Bond Market Activity – Govt

The government has emphasised that its debt management in the near term will seek to maintain the basic functioning of financial markets while developing a roadmap for the gradual resumption of activity in the bond market.

In a letter to the International Monetary Fund before the Executive Board approval of a programme for Ghana, the Ghana government said its goal for this year will be to maintain a functioning primary market in Treasury bills.

“We will carefully manage the first few domestic bond issuances following the restructuring to prioritize successful execution, favouring private placements.”

“Once market access is more firmly established, our primary issuance would switch to competitive auctions” it added.

Furthermore, it pointed out that efforts will be subsequently made to strengthen and deepen domestic capital markets to enhance secondary market activity and improve price discovery.

“We will continue publishing a credible Medium-Term Debt Strategy and an updated annual borrowing plan in line with international best practices”, it concluded.

Policies to be implemented to increase debt transparency

Continuing, the government said it will also implement policies to increase debt transparency and accountability to enhance debt management effectiveness and efficiency.

To achieve this, it stated that the current securities operation infrastructure used by the Debt Management Office (CD-RMS) will be completely upgraded to a modern system by the end of 2024, adding, the implementation strategy will seek to integrate all state institutions involved in the process of contracting and servicing of public debt with the aim of digitalizing the process to increase the pace of debt service processing, improve the accuracy of debt recording and accounting by reducing errors and omissions, and improve debt transparency among relevant state institutions.

Debt reporting will include details on contingent liabilities, including key State Owned Enterprises (SOEs) with substantial fiscal risks such as COCOBOD, ECG, VRA, GWCL, TOR, GNPC, GNGC, and BOST; any collateralized debt issuance will be limited and closely monitored.