Flashback: Ghana will not default on Eurobond payments

Amidst Ghana’s rising borrowings and debt servicing, there were various cautions from stakeholders as to whether or not the 2009 government will default on Eurobond payments.

Ghana’s mid-year budget review provided few answers as to how the National Democratic Congress (NDC) planned to address the deterioration in public finances since it regained power in 2008.

In Ghana, Eurobond issuances over the years have been seen as a major tool to stabilize the local currency. Borrowings are also made to meet a certain objective such as to fund government’s budget deficit, to retire maturing debts or for specific developmental projects.

The issuance of Eurobonds have been mostly linked to the stabilization of the economy, shoring up of foreign reserves and a subsequent boost in economic growth when proceeds from the Eurobond are effectively and efficiently managed.

Read the full story originally published on February 5, 2009, on Ghanaweb below

Read the full story originally published by afsx.com below:

The NDC government does not intend to default on repayments of the $750 million Eurobond the West African country issued in 2007, its transitional finance committee said late on Tuesday.

The administration said last month it was "broke" after spending by the previous government pushed up the fiscal deficit, raising concerns among investors holding the Eurobond.

"We are committed to making good our obligations," said Moses Asaga, a former deputy finance minister who sits on the three-man committee.

Ghana intends to reduce its budget deficit to 9 percent of Gross Domestic Product (GDP) in the first year of John Atta Mills' presidency, down from 13.5 percent in 2008, Asaga told Reuters.