Ghana has initiated a platform for trading short-term debt, which expands upon the fixed income market established over eight years ago.

This development coincides with the country's efforts to restructure debt to ensure sustainability under an International Monetary Fund program.

The commercial paper market facilitates the buying and selling of debt, offering companies and organizations the opportunity to issue debt quickly and investors the chance to access improved creditworthiness, stated Abena Amoah, Managing Director of the Ghana Stock Exchange, in the capital city, Accra.

“I’m excited to see the diverse business community here and I believe that this CP market we are launching today will provide you with viable solutions to meet some of your short-term financing needs,” Amoah said Friday.

The commercial paper market has been present in Ghana for some time but has operated on a limited scale, characterized by low liquidity and minimal regulation.

Its formal launch is intended to complement the fixed income market introduced in August 2015, which facilitates the trading of government and corporate bonds. This launch coincides with Ghana's ongoing restructuring of its debt, valued at $43.6 billion, as part of conditions outlined in a $3 billion program with the IMF.

Ghana, having completed a domestic debt restructuring last year and reached a preliminary agreement with bilateral lenders earlier this year, aims to finalize a comprehensive debt restructuring agreement on $13 billion with Eurobond investors by the end of May. An earlier agreement with bondholders was rejected by the IMF for failing to meet debt sustainability criteria.

Companies seeking to issue on the market must possess a net worth of 5 million cedis ($357,485), according to Wilson Nelson, President of the Ghana Securities Industry Association. Additionally, they must be prepared to offer a minimum of 1 million cedis worth of instruments, with durations ranging from as short as 15 days to 275 days.

“With the introduction of the commercial paper market in Ghana, the plan to diversify the investment space and investor base is now fully on course,” Ernest Addison, Governor of the Bank of Ghana said in a speech read on his behalf. “This diversification helps small and medium-scale enterprises and emerging businesses struggling to access the traditional financial channels.”