Business News of 2014-03-25

Government forced to suspend third Eurobond issue

Government has put on hold its plan to raise $1 billion from investors outside the country.

Government had intended to issue the bonds by next month.

Joy Business gathers that the decision has been influenced by what managers of the economy describe as unfavourable market conditions.

A source close to government has hinted the bond issue will be reconsidered when market conditions improve.

"Looking at rate at which the yield on our second Eurobond is going up, it might not be prudent to go to the market now. The state was hoping to use the funds raised to pay maturing debts and fund some projects outlined in this year's budget", the source added.

With a temporary freeze, managers of the economy might have to look for alternate funds in the interim to finance government operations.

The Finance Ministry last year secured approval from parliament to turn to the international market to raise $1 billion.

Ghana last year successfully raised $1 billion from the international market in the second Eurobond issue which was heavily oversubscribed.