African countries must focus on improving their credit ratings and investor confidence to attract more foreign funding, the Executive Director for African Subsidiaries at Access Bank Plc, Seyi Kumapayi, has said.
He explained that while alternative funding sources offered some solutions to plug financial gaps, real progress would require stronger sovereign ratings and a shift from how investors view the risks of investing in Africa.
Consequently, he said governments needed to improve the liquidity of local financial markets, make budget processes more transparent and strengthen public institutions.
These steps, he said, are key to improving access to foreign capital and driving long-term growth in Africa.
Mr Kumapayi was speaking at a breakfast seminar last Friday in Accra on the theme: “The Impact of Credit Ratings on the Debt Capital Market in Ghana.”
Following its expansion into the Ghanaian market earlier in the year, the seminar, hosted by Agusto and Company Limited, brought together bankers, market players and regulators to discuss the need to deepen and broaden the funding options available to financial institutions and real sector companies to boost liquidity in the system, while sustainably promoting growth and development.
“Appetite for African Debt and Funding will largely be determined by the trajectory of the global environment. Should inflation continue to decrease in the U.S. and elsewhere and the Federal Reserve moves to lower interest rates, financing conditions for emerging markets could improve, providing an opportunity for banks to
diversify their funding sources and tap the foreign markets for funding,” he said.
Mr Kumapayi said, “Alternative funding sources also present promise for banks looking for innovative solutions to funding gaps.