Government borrows GH¢5.7b bonds, notes

A total of GH¢5.737 billion were borrowed by government in October and November 2018 through bonds and notes.

Out of this, GH¢4.518 billion were mainly 2-year notes whilst GH¢988,694,871 were 3-year Government of Ghana bonds. GH¢230.2 million was raised by issuing 1-year note.

Whilst the 3-year bond attracted a yield of 19.50 percent, the 2-year notes attracted yields of 19.50 percent, 17.50 percent, 17.24 per cent and 17percent. As many as four 2-year notes were issued by the Bank of Ghana on behalf of the Government of Ghana.

The coupon rate for the 1-year note was however 15.00 percent.

According to a circular from the Ghana Stock Exchange, the debt instruments have already been listed on the exchange. The interest payment is expected to be done half-yearly from the date of issue.

The circular further stated that “the participation in the Government of Ghana fixed income securities was opened to non-resident foreigners in respect of securities with tenure of two years and above.” This suggests that the 1-year note was reserved for Ghanaians.

Meanwhile, government raised GH¢902.15million in short term securities (Treasury bills) last week. The targeted amount was GH¢827million.

This came on the back of an increase in Treasury bill rates. The yield on the 91-day went up by 0.9 percent to 14.48 percent this week as against14.39 percent last week while that of the 182-day T-bill moved up marginally by 0.01 percent to 14.82 percent this week versus 14.81 percent last week. The yield on the 1-year note remained unchanged at 15 percent this week.

Analysts say the consistent drop in inflation is likely to drive a mixed performance of short-term yields (up in one week, down in another, and vice versa) in the coming weeks.

Overall, government spending this year has slowed down as it pushes to achieve a fiscal deficit target of 4.9 percent this year.

Comparing the first 42 weeks of 2018 to that of 2017, government has so far borrowed GH¢32.29 billion in 2018 as against GH¢53.26 billion in 2017. In actual fact it targeted GH¢34.23 billion domestic borrowings in 2018 compared with GH¢56.32 billion in 2017.