BoG calls for more domestic participation for financing options

Dr. Maxwell Opoku Afari, First Deputy Governor, Bank of Ghana (BoG)

Following the rush-out of foreign investors from Ghana’s capital market that eroded the country’s net international reserves by about US$ 1 billion, there is need for more domestic involvement to rectify the country’s current financing options.

This call made by the Dr. Maxwell Opoku–Afari, the First Deputy Governor of the Bank of Ghana at the launch of International Monetary Fund’s (IMF) Regional Economic Outlook for Sub-Saharan Africa.

Dr. Opoku–Afari said this will ensure that the country has a well-balanced financing option, in order that the exchange rate risk are well contained.

“We must ensure that real interest rates are attractive to attract domestic resources,” he noted.

Dr. Opoku–Afari said, “we need to deepen the domestic market to make it attractive for pensions funds and our domestic investors to be able to participate in financing the gap that we have.”

Currently, the share of government domestic bonds holdings by foreign investors has rebounded by the end of March 2019 to about GHc 28.9 billion after dropping to the lowest level in recent times at GHc 26.6 billion in February, when the cedi was depreciating at about eight percent.

“The recent pressures on exchange rate mainly due to a lot of demand on the exchange rate from non-resident investors, who were participating in the closing the country’s financing gap,” Dr. Opoku–Afari explained.

If you look at the number of investors that participated in the ESLA bond, with almost the total subscription being made by domestic investor’s shows that the appetite is already there, he indicated.

With efforts to develop the domestic market, domestic investors are expected to be able to increase financing part of the gap. By this the country will be able to minimize the risk that comes with over-reliance on foreign participation in the domestic market.

Total Asset under management, including pension funds and collective investment schemes, increased from GHc 31.1 billion at the end of December

2017 to GHc 35.7 billion at end of June 2018, representing an increase of 15 percent.


Government is set to implement reforms in the capital market that will enable access to long term funds and promote transparency. This is expected to substantially increase the industry’s share of GDP, which is currently estimated at about 12.1 percent of the rebased GDP to about 60 percent over the medium term.

By Joshua W. Amlanu