A three-year inflation indexed bond is to be introduced next month as part of government measures to restructure the domestic debt and reduce pressure on public finances.
It would also cut down on the cost of government borrowing. The Minister for Economic Integration and Regional Co-operation Dr Kwesi Nduom told the Ghana News Agency that government was currently working out the modalities with the Central Bank to achieve the purpose, adding that the process would begin this week.
He did not disclose the yield on the bonds but said it will slightly be pegged at some percentage points above inflation so that holders could get a return on their investments.
Dr Nduom said guidelines would be published over two weeks, with the inaugural auction in the first week of September. The three-year period within which the bonds are to be redeemed would give government ample time to carry out measures to stabilise the economy.
Dr Nduom said there are also plans to introduce several other forms of bonds in line with government's aspirations to reduce its borrowing from domestic sources and to free resources for the private sector.
Giving a brief on the recommendations of the recent National Economic Dialogue on how to revamp the economy, Dr Nduom said government's focus hereafter would shift slightly, making debt management in line with the Highly Indebted Poor Country's Initiative a priority.
He said, "strict fiscal management is also an area government is concerned about and we will ensure that we spend only what we are able to collect." Dr Nduom noted that it was in that direction that the Minister of Finance placed a limit on the spending of Ministries, Departments and Agencies.
