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22.09.2004 Business & Finance

Government to raise funds through sovereign bonds

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Accra, Sept. 22, GNA - Government is considering raising funds for the finance of critical development programmes through the issuing of sovereign bonds on the international financial market, Mr Yaw Osafo-Maafo, Minister of Finance said on Wednesday.

Speaking at a signing ceremony of an 850 million-dollar trade finance facility for 2004/2005 cocoa purchases, Mr Osafo-Maafo said the Government was seeking to use the advantage provided by the country's credit ratings to explore financial support from the international finance markets.

The Government has obtained sovereign rating from two world-renowned rating agencies, Standard and Poors and Fitch Ratings, which gave the country B+ and B respectively.

Mr Osafo-Maafo said a team of officials from the International Monetary Fund would arrive in the country soon to discuss ways through which to operationalize the use of sovereign bonds to raise monies for government projects.

The Minister said to continue to maintain a good economic performance, the government had taken prudent measures to streamline public financial management by passing appropriate laws to guide financial conduct in the public sector.

A key law in this direction is the Public Procurement Act to guide the conduct of purchases in the public sector since about 60 per cent of government expenditure goes towards the buying of items.

Mr Osafo-Maafo lauded the contribution of the international banks in measures to improve the contribution of the cocoa sector, saying the increased confidence in the economy by the international financiers would yield good results by way of increased investment.