‘Ghana’s Eurobond rate shows low confidence in economy’

An economist with Databank Research, Courage Kingsley Martey, has said Ghana’s recent Eurobond rate signifies low investor confidence in the economy.

According to him, the $1 billion facility with a 15-year maturity period at a coupon rate of 10.75 percent is a wakeup call for government to fix the nation’s weakening economic fundamentals.

“… If we thought that our perspective of the economy is the only thing in the minds of the investors, I think we need to rethink it again,” Martey told host of Starr Business analysis programme, Business Edition, Paa Kwesi Asare.

His comments come a few days after an emailed response from the International Monetary Fund (IMF) to the B&FT described the coupon rate of Ghana as “unfortunate”.

The IMF said: “An important element of Ghana's IMF-supported programme is strong fiscal adjustment, underpinned by fundamental reforms, to restore macroeconomic stability".

Martey said the development received little attention on the road show, adding “the clear signal it sent particularly to the managers of the economy is that foreigners’ vote of confidence on the economy as we speak is quite low compared to what we are thinking.

“It is a fact that the fundamentals are improving since the IMF programme started but I think this is a wakeup call, this is a reality check that we shouldn’t get ahead of ourselves and we have to be cautious in our optimism”.