GHANA’S debt is expected to rise further with the expected issuing of $1billion Euro bond by July this year.
The total debt of the country could go above GH¢80 billion, almost 70 per cent of Gross Domestic Product (GDP) if the planned sovereign bond goes ahead.
Already, government had planned to borrow GH¢25.4 billion in debt instrument during the first half of this year.
Though some of the proceeds have been used to settle maturing debts, the rate at which the government is borrowing coupled with the IMF loan makes it alarming.
The nation’s total debt as at the end of 2014 stood at GH¢76.1 billion, representing 67.1 percent of GDP.
Head of the Parliamentary Finance Committee, James Avedzi told Reuters that government will proceed with the Eurobond which parliament has already approved, adding “the Finance Ministry has started the process, hoping that by July they will go to the market”.
He however said government will no longer pursue a bridge finance loan that would have been worth up to $1billion.
“The government has rescinded its decision. It is not going for the bridge loan,” Mr. Avedzi said.
The government said in a memo to parliament in March it had started talks over the loan with a consortium including Bank of America Merrill Lynch and Belstar Capital and hoped to complete it before July.
Ghana first went onto the capital market in 2007 to raise $750 million worth of Eurobond.
The sovereign bond made Ghana the first nation in sub-Saharan Africa after South Africa to borrow from international capital markets.
Last year’s 10-year bond raised $750 million in cash and $250 million in a buy-back of the 2007 issue.
<<Print>>