The African Development Bank (AfDB) since 2005 has been issuing bonds to raise funds for development through its Local Currency Initiative. The Bank has since that period issued a series of offshore bonds linked to local currencies of some African countries including Ghana.
The Bank had issued bonds in the Botswana Pula, Ghana Cedi, Kenya Shilling, Tanzania Shilling, Uganda Shilling, Zambian Kwacha and the Nigerian Naira.
The Bank in its financial report released today May 24, 2017 at the 52nd Annual Meetings currently ongoing in Ahmedabad, India, reported that it has so far raised in the Ghana cedi, an equivalent of $71 million.
The Bank entered into an agreement with the International Finance Corporation and the African on June 1, 2012 to enter into cross-currency swap transactions to facilitate local currency lending and bond issuance in Africa.
“The agreement will enable the IFC and the AfDB to collaborate and benefit from each other’s local currency bond issues, enhancing their local currency funding capacity to support their clients’ development projects,” said a joint statement issued by the two institutions.
The Bank says it has received authorization to issue domestically in over 10 African markets including, the CFA Franc zone, Zambia, Ghana, Egypt, Tanzania and Kenya.
By this Initiative, a foreigner could take the currency of a European country or the US dollar, go to any bank in Ghana and purchase the bonds in the Ghana cedi, the Bank has said.