By Joshua Worlasi AMLANU
Corporate institutions are being encouraged to embrace capital markets as the economy recovers, with 2024 Gross Domestic Product (GDP) growth at 5.7 percent and inflation dropping to 23.1 percent by February 2025 per the Ghana Statistical Service and Bank of Ghana.
Madeline Nettey, Chief Executive Officer (CEO) of Republic Investment, sees this as a chance to move beyond bank loans – especially with government eyeing a 2025 bond market return.
The 2025 budget, presented by Minister of Finance, Dr. Cassiel Ato Baah Forson, seeks to slash spending to tackle debt…. potentially nudging firms toward alternative funding.
Speaking exclusively with B&FT, Ms. Nettey said prevailing conditions make the historically underutilised corporate bond market ideal for businesses.
“There are companies with better risk profiles than government, yet they are not accessing the capital markets for funding. We need more corporates to issue debt and equity instruments to diversify the investment landscape,” she explained.
She blamed limited awareness, in part, with the comparatively newer fixed-income market lagging behind equities in promotion.
The corporate segment of the Ghana Fixed Income Market (GFIM) comprises corporate bonds and notes issued by a limited number of companies, with trading activity recorded for five distinct issuers as of February 2025: Ghana Cocoa Board (COCOBOD), Izwe PLC, Kasapreko PLC, Bayport Financial Services and Letshego Ghana PLC.
According to the February 2025 GFIM report, the total outstanding corporate securities were valued at GH¢8.64billion – a decline from GH¢13.37billion in February 2024.
This segment has raised significant funds historically, but its contribution to the overall GFIM market size remains small – accounting for just 2.26 percent in 2025, down from 3.78 percent in 2024 as the market remains heavily dominated by government securities, which contribute 99.17 percent to the total market size.
Trading in the corporate segment for January-February 2025 reached a volume of GH¢ 944.83million and a value of GH¢787.27million across 135 trades, showing a marked increase from GH¢ 475.2million in volume and GH¢379.79million in value for the same period of 2024.
The recent commercial paper market’s launch offers short-term financing options, which Ms. Nettey says could fuel expansion and enrich investor options.
“Corporates need to start leveraging the capital markets more actively to raise funds for expansion. This will not only deepen the market but also provide investors with a wider range of assets to invest in,” she said.
Recent economic shifts – post-DDEP caution in 2024, election-year jitters and inflation’s late uptick – have given way to optimism under President John Mahama’s new administration, with honoured DDEP payments and oversubscribed Treasury auctions signalling confidence.
The IMF-backed bond market re-entry could lower Treasury rates, opening doors for corporate borrowing. Ms. Nettey envisions diverse instruments – equities, debt, quasi-options – boosting portfolios like pension schemes.
Over the past two month there has been a significant reduction in Treasury bill rates amid improved investor sentiment. On average, Treasury yields have declined by over 1,000 basis points.
The 91-day Treasury bill rate as of March 17, 2025 has dropped to 15.86 percent from 28.19 percent, representing a reduction of 1,233 basis points.
Similarly, the 182-day Treasury bill rate has fallen from 28.92 percent to 16.93 percent, a decline of 1199 basis points – while the 364-day rate dropped from 30.15 percent to 18.97 percent, a reduction of 1,118 basis points over the same period.
Many firms stick to loans and overdrafts, a habit Ms. Nettey attributes to poor education on alternatives
“We are looking forward to introducing corporates to take advantage of the capital market and issue various securities,” she said.
She predicts debt will lead 2025 issuances, with equity IPOs (Initial Public Offer) brewing – and Republic Investment is poised to assist with their broad offerings.
