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Gov't to support state agencies to issue corporate bonds
From: Ghana | Myjoyonline.com          Published On: July 19, 2013, 10:38 GMT
 
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Gov't  to support state agencies to issue corporate bonds

Deputy Finance Minister, Ato Forson


Government says it would soon guarantee bonds for Volta River Authority (VRA), Electricity Company of Ghana (ECG), Ghana Grid Company (GRIDCO) and the Ghana Airport Company to facilitate funding of their operations.

The move would also ensure that these institutions become financially independent as they would be able to raise their own capital for operations.

If government's plan becomes a reality, these institutions would not be relying too much on government funds or crude oil imports to run their activities.

Deputy Finance Minister, Ato Forson, told Joy Business government is taking this initiative in order to reduce the pressure on its financial expenditure.

"It's about time we encourage some of our SOEs [State-owned Enterprises] that are profitable to stand on their feet so that we don't continue the trend where government takes debt, put it on our balance sheet and give it to [Ghanaians]", said Ato Forson.

He was optimistic that if these state agencies borrow on their own balance sheets, they would be more committed to ensuring repayment and do additional investments, compared to when they borrow from government.

President John Mahama recently announced that state institutions that have a strong balance sheet should no longer be given financial support by the state.

Some analysts, however believe that plans by government to issue its first seven-year bond, to raise GHC 100 million next month, would open the door for state institutions to do the same.


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