The planned $1 billion Eurobond Ghana intends raising on the international market to support the economy is in a limbo, Business Finder gathers.
This paper’s source at the Finance Ministry suggests that the several conditions being forced on the country under the International Monetary Fund’s bailout programme could prevent Ghana from issuing its fourth Eurobond.
The International Monetary Fund as well as the World Bank has cautioned Ghana over its indebtedness and its risk of joining the list of Highly Indebted Poor Countries (HPIC).
Already, a deputy Finance Minister, Mona Quartey has told the media that the country has submitted its planned programme regarding the Eurobond to the IMF for scrutiny and approval.
But returning to the capital market to raise finance to settle maturing debts and execute infrastructure projects hang in a balance, the source added.
The IMF's Communication Director, Gerry Rice at a press conference in Washington DC on the status of the country’s one billon Eurobond, said the borrowing should be done in a manner not to escalate Ghana's indebtedness.
“For countries at high-risk distress like Ghana, reducing the debt burden and associated vulnerability is a priority so the authorities have to be very selective with regards to new non-concessional borrowing since that can escalate.”
He added, “Fund policies are flexible, they can accommodate some non-concessional borrowing if indeed it is intended to finance critical and profitable projects for which concession finances are not available”.
Ghana’s total public debt hit GH¢88 billion at the end of March 2015, representing about 67 per cent of the total value of the economy.
The nation issued its first Euro bond, a 10-year debt instrument seven years ago.
The issue, which raised $750million from investors at a coupon rate of 8.5 per cent, made Ghana the first nation in sub-Saharan Africa after South Africa to borrow from international capital markets.
In 2013, Ghana successfully raised $1 billion from the international market in the second issue which was heavily oversubscribed.
Last year’s 10-year bond raised $750 million in cash and $250 million in a buy-back of the 2007 issue.
<<Print>>