Gov’t seeks US$400 million more debt

The Bank of Ghana will tomorrow auction government’s 3-year bond to raise US$400million for restructuring maturing debts and also for liquidity management.

This will be the second three-year bond to be issued this year, following an earlier one of GH¢630million issued in February.

The new auction is part of government’s earlier plans to borrow about GH¢25.42billion from the domestic market within the first six months of this year, which is twice what the state borrowed from the market in the same period last year.

Already, government has since the beginning of the year raised about GH¢16.3billion through the issuance of various Government of Ghana securities.

The last time government entered the domestic bond market, to raise GH¢974million through the sale of its 5-year bonds, it was oversubscribed to affirm investors continued confidence in the economy despite economic challenges and fears that the country’s debt situation is fast nearing unsustainable level.

Various credit rating agencies, Fitch and Moody’s, in their latest assessment of the economy cut Ghana’s credit ratings outlook on fears of deteriorating currency and debt trends, with the debt-to-GDP ratio jumping from 54.8% in 2013 to 67.2% at the end of 2014.

However, the recent approval of Ghana’s three-year budgetary support programme with the IMF earlier this month is expected to further enhance investor confidence in the economy.