Government is set to issue its first three year bond this week to raise about half a billion Ghana cedis using the book building route.
This will bring to three the total number of bonds issued so far this year with the previous two being five-year bonds, which together raised a billion cedis to refinance debts.
Though the Finance Ministry is yet to determine the amount it seeks, information provided by the central bank earlier this month indicates that the government will need about $500 million to settle maturing debts and support the budget.
So far, government has raised about GH¢10.62 billion cedis through various debt securities and going by the Bank of Ghana’s notice served of government’s plan, the total value of issued securities this year will reach GH¢15.5 billion by the end of the month.
It is expected that the issuance of the three-year bond will be oversubscribed following oversubscription of the previous two bonds. Bonds offer a relatively high return to investors.
However, the borrowing costs continue to remain a concern to economic policy analysis.
According to the Bank of Ghana, Ghana’s debt currently stands at $25.6 billion as at December last year and it’s seen by rating agency, Fitch, which recently maintained Ghana’s credit ratings at B with negative outlook as a worrying situation.
Source: myjoyonline