Elmina, Nov. 27, GNA- The Governor of the Bank of Ghana (BoG), Dr Paul Acquah on Monday observed that the present course of macro-economic and financial sector developments, offers opportunities for the development of the bond market in Ghana, to facilitate economic growth. He said that the current successful stabilization of the country's currency, was fundamental to the quest for growth and poverty reduction and therefore provides the foundation for deepening the domestic capital market.

Dr Acquah, stated these at the opening of a three- day workshop on 93Domestic Bond Market in Ghana=94, jointly organized by the Ministry of Finance and Economic Planning and the BoG to help promote the development of the domestic bond market in the country. It is among others, being attended by parliamentarians, officials from the ministry and the BoG and other financial institutions as well as representatives of foreign finance organizations, from countries like Singapore and Malaysia.

Dr Acquah, noted that the development of the domestic capital market, particularly the bond market, would encourage domestic savings through a broad set of financial instruments and investment products and serve as a vehicle for attracting foreign capital.

It will also reduce exposure to the risks of currency and maturity mis-matches associated with borrowing on external capital markets and offer an alternative but complementary source of funding to bank-debt financing for corporate as well as the public sector. He noted that domestic financial markets are 93vital pillars=94 of a growing economy and should be an integral part of the country's economic strategy, and that the challenge is to develop and expand the domestic capital as an essential part of the development paradigm.

He however, pointed out that a bond market cannot be legislated into existence, and has to grow from participation of issuers, investors and intermediaries in a stable macro-economic environment.

Dr Acquah, said this therefore, requires that major players such as the government, corporate and public institutions have credibility, without which he said, a viable bond market cannot be created. =93Government credibility is established through sound, sustainable and time consistent economic policies. Sound management and accounting practices, a good track record of respecting contractual obligations and good corporate governance establish corporate credibility=94, he declared.

The Governor also pointed out that a strategy for the development of a bond market in Ghana would require that policies that secure internationally comparable risk adjusted rate of return to 93sustain investor appetite=94 were put in place.

Opening the workshop, the sector Minister, Mr Kwadwo Baah-Wiredu, also underscored the importance of a domestic bond market to the accelerated development of the country.

He said with the 2007 budget, 93diversifying our sources of financing is an important theme=94, and that the government hoped to stimulate private sector investment in major infrastructure projects, such as energy, roads and housing.

He said in line with this, the development of the bond market for municipal, parastatal issuance as well as mortgage-backed and corporate bond issuance, is critical to achieving Ghana's objective of accelerated economic growth in the 9 per cent per annum range. The Minister, pointed out that the nation cannot achieve accelerated growth with only limited bank lending to the private sector at rates ranging from 20 to 25 per cent, and said if the right framework is evolved and issuers and invested educated, the private sector in Ghana will have two alternative means of financing, the competitive bank loans and the issuance of bonds domestically.

The Minister, pledged that the government, will continue to foster the development of an efficient domestic government bond market with benchmark securities of increasing duration, predictable and regular issuance and strong and primary and secondary markets, adding, =93market oriented government funding is the pillar of a vibrant domestic securities market.

Among topical issues being deliberated upon, are 91existing regulations and legal framework of the securities industry: A review, Legal and regulatory framework for a successful bond markets and municipal access to domestic bond market: challenges and road map and project financing using the bond market'. 27 Nov. 06