Ghana to sell first local-currency bond since 2022 debt default

Ghana will sell its first local-currency bond next week for the first time since its 2022 debt default, returning to the market to help finance its budget.

The sale of seven-year securities will start on March 30 with an initial pricing guidance, and close on April 1, bond bookrunners said in an emailed statement.

President John Mahama’s government is banking on its success in slowing inflation to a near three-decade low of 3.3% and the central bank’s move to cut interest rates by 14 percentage points since July to 14% to attract investors.

“With market rates having fallen materially and Ghana’s external buffers and fiscal metrics having improved significantly, the yield on the new bond,” may not be very attractive for foreign investors, said Samir Gadio, head of Africa strategy at Standard Chartered Plc. Still, for overseas investors, Ghana is good because of “diversification factors,” he said.

The government of Africa’s biggest gold producer has been spurred by a rally in bullion prices that helped the central bank build foreign exchange reserves and stabilize the cedi.

Resumption of local debt offerings is aimed at “re-establishing a domestic funding program,” the Finance Ministry said in a statement. It’s targeted at “rebuilding a sovereign yield curve, providing investment opportunities and restoring market confidence for retail and institutional investors.”