Government raises GHS1.07 billion from 3 year bond

The Government of Ghana accepted GH¢1.07 billion of all bids submitted for the 3-year bond issued yesterday, March 5.

According to the results of the auctioning, the coupon rate or yield was 20.75%, same as the last 3-year bond issued in January 2020.

Some analysts believe the coupon rate was in line with trading levels for similar bonds on the secondary bond market.

Class Business understands the funds raised from this debt instruments will largely be used to retire maturing debts.

The government will this year spend GHS22 billion on interest payments on loans.

The country is, however, targeting GHS67.07 billion as total revenue and grants for this year. Out of this, a substantial chunk will go into wages and emoluments, as well as cost of servicing debt.

Interest payments on Ghana’s debt increased by 8.97% to 40.71% at the end of the third quarter of 2019.

On 30 September 2018, interest payments alone on loans contracted by the government of Ghana were estimated to have grown to about 31.73%.