Government Borrows GH¢5.3 Billion To Settle Debts
The government of Ghana continues to contract loans from both the local and international markets to service debts. To that effect, government has issued a 3-year fixed rate bond to the general public to mobilize GHC1.5 billion for the restructuring of government debt and also for maturity settlement. This comes on the heels of floating a $1 billion (approximately GH¢3.8 billion) Eurobond on the international market.
According to the Daily Guide newspaper, this is GH¢500 million more than the amount planned for borrowing on Issuance Calendar for Government of Ghana Securities. An auction is officially slated for Thursday, October 22, 2015 and each bond carries a face value of GH¢1, with a minimum bid of GH¢50,000 and multiples of GH¢1,000 afterwards. This was contained in a public notice from the Central Bank, signed by Caroline Otoo, its Secretary, on October 14, 2015. Interest payment is to be made semi-annually from the date of issue in April and October and the bond is available to both residents and non-residents.
Meanwhile, according to reports, proceeds from Government’s fourth Eurobond have hit the accounts of the Bank of Ghana (BoG). This comes after Finance Minister Seth Terkper and Central Bank Governor Dr Henry Wampah led a government delegation to London, Los Angles, San Francisco, Boston and New York on an 8-day Eurobond roadshow.
Oversubscribed with orders exceeding $2 billion, the bond is a soft amortizing one with tenure of 15 years and billed to mature in 2028, 2029 and 2030. The principal would be repaid by three installments of $333 million in 2028 and 2029 and US$334 in 2030.
Government, for the whole of this year, has planned to borrow GH¢50 billion, and this is expected to bring to GH¢115 billion, the country’s total public debt if all the scheduled borrowing events come off. Ghana has crossed the crucial 70 percent threshold of the debt-to-GDP ratio since December 2014.
Official figures as at May 2015 showed that Ghana’s total public debt grew by GH¢13.4 billion from the GH¢76.1 billion recorded in December 2014 to GH¢89.5 billion, representing some 67.1 percent of GDP. Ghana’s total public debt, according to Reuters, rose to GH¢94.5 billion ($23.7 billion) by end-June, equivalent to 71 percent of gross domestic product (GDP), up sharply from 67 percent the previous month due to currency depreciation.
In October, government planned to receive GH¢2.4 billion from its 91-day T-bills, GH¢800 million from 182-day T-bills, GH¢120 million from 1-year note, GH¢300 million from 2-year note and GH¢1 billion from 3-year fixed rate bond, all totaling GH¢4.62 billion.
In November, Government planned to collect GH¢2.4 billion from investors through its 91-day T-bills, GH¢1 billion from the 182-day T-bills, GH¢180 million through its 1-year note and GH¢300 million through the 2-year note.
For December, an amount of GH¢4.16 billion is expected from investors made up of GH¢3 billion in 91-day T-bills, GH¢800 million from 182-day T-bills, GH¢60 million in 1-year note and GH¢300 million in 2-year note.
Source: YEN.com.gh
