The International Financial Market has Ghana's pulse - Baah-Wiredu

Accra, Nov. 9, GNA - The government's recent raising of 750 million dollar Eurobond has been described as a vital pulse of measuring investor appetite for various levels of interest rates and maturities in Ghana.

Mr Kwadwo Baah-Wiredu said this in a statement in fulfillment of a promise to return to brief Parliament on how the team is able to handle the issue.

The amount is to support the implementation of the Medium Tem Investment Plan.

He explained that Ghana was welcomed by international debt investors when it priced the first offshore bond issue by a sub-Saharan African government for almost 30 years

The 750 million 10-year deal was led by Citigroup and UBS attracting more than 3 billion dollars or orders from over 158 accounts across the world.

He expressed satisfaction with the result and reiterated that the money raised would be used to tackle energy bottlenecks that have blighted the economy in recent years as well as improve transport infrastructure.

He said these types of spending have a higher economic return than typical World Bank and African Development loan-funded projects, "which are smaller, take longer to arrange and tend to focus on social areas such as education and health."

Mr Baah-Wiredu urged his colleagues to take note of the details of the successful issue, stressing that it signals government's intention to diversify its sources of funding following the completion of Ghana's programme under the IMF's Poverty Reduction and Growth Facility on October 31, 2006

He listed the reasons among other things to be the long periods from conception to disbursement, up to three years, for multilateral and bilateral concessional facilities and also the inability of government to access concessional funding in amounts large enough to meet the infrastructure requirements to support accelerated growth. "Besides, sometimes programmed conditionalities were at variance with national policies."

The Finance and Economic Planning Minister mentioned that the road show by government delegations took them to Los Angeles, New York, Boston, London and Frankfurt. Other capitals visited were Munich and Zurich. He said the road show indicated strong investor interest who agreed to a pricing guideline of 8.5 per cent. Mr Baah-Wiredu said more than half of the amount notably 460 million dollars was being directed into energy to demonstrate government's commitment to put behind the permanent energy crisis.

The road sector would receive 200 million dollars representing 27 per cent while the remaining 12 per cent of 90 million dollars will go to railways.

The transaction has been hailed as a landmark transaction not only for Ghana, but the entire sub-Saharan African region whose only international issuer in the past has been South Africa. Mr Malik Alhassan Yakubu, Second Deputy Speaker who was in the chair referred the statement to the Finance Committee and recommended that hearing and debate be done behind closed doors due to the sensitivity of the subject.