Government has not ruled out the possibility of selling diaspora bonds to Ghanaians abroad and is exploring the best strategies to move forward, Charles Adu Boahen, the Minister of State at the Finance Ministry, has said.

According to Adu Boahen, diaspora bonds require comprehensive work to issue, with an analysis by the Ministry of Finance concluding that issuing one is likely to be challenging—the reason why the government is carefully considering how best to implement the idea.

“The challenge about diaspora bonds is that to sell them, you have to have permission to distribute retail. So, if you are in America and you want to sell diaspora bonds to an investor base, you have to actually distribute or market it to every individual. [Because] every state in America has different rules when it comes to selling securities to individuals, you have to have a whole distribution team of brokers all over the country.

Each one of them has to abide by the rules to be able to sell the products to individuals and then try and generate the funds. When we looked at the total market and what it would take to do that kind of set-up, it was very challenging,” he told Business24 in an interview during the Ghana Diaspora Investment Summit in Accra.

He added: “It would be easier if we could sell a Ghanaian product like a domestic bond and have people remit their funds here and buy the bond. So we are looking at different structures that would work and appeal to everybody, but also [so that] we would not run into regulatory impediments.”

Ghana, he also said, is interested in the green bond market and will join other African countries, including Egypt, South Africa, Nigeria, Namibia and Kenya, in issuing one.

Government is already targeting to raise as much as US$1bn through a sale of sustainable bonds. Reports suggest the proceeds would help refinance domestic debt used for social and environmental projects, including loans taken to pay for the free senior high school policy.

Social bonds seem to have gained currency since the outbreak of the coronavirus pandemic, yet so far only a few sovereign issuers have sold them, including Chile and Ecuador.