IFC to issue over $1b local currency bonds in Ghana, other African markets

The World Bank Group’s International Finance Corporation (IFC) says January 18, 2012 it has obtained approval from Ghana and the eight member countries of the West African Monetary Union to establish local currency bond programmes to strengthen domestic capital markets and support private sector development in the region.

The approvals enable IFC to issue over $1 billion equivalent in bonds in Ghanaian cedis and CFA francs over the next 10 years, said the private arm of the World Bank Group.

The bonds will be sold in their respective markets to domestic and foreign institutional investors, it added as “proceeds will fund IFC projects that support private sector development in key areas such as infrastructure and access to finance for small and medium enterprises.”

“Deep and liquid local currency bond markets are indispensable in providing diversified long term funding sources for private sector companies, including SMEs. The agreements with the government and regulator of Ghana and the West African CFA countries will enable us to support the development of these markets. They also allow us to help our private sector clients mitigate foreign-exchange risk, so that they can grow their businesses and contribute to job creation and growth in Africa,” said Jingdong Hua, IFC Vice President and Treasurer.

The corporation has also gained approval for a local currency bond issue in Kenya, and has hinted working with the authorities in Nigeria on a similar approval.

By Ekow Quandzie

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