Business News Mon, 3 Sep 2018

Century Bond could provide cheaper, longer-term financing for Ghana – Oppong Nkrumah

Information Minister-designate, Kojo Oppong Nkrumah, has explained that Ghana’s quest for a cheaper and longer-term loan is the reason for the 100-year bond currently under consideration.

President Addo Dankwa Akufo-Addo announced on Saturday that his economic management team is considering floating a $50 billion Century Bond but did not give timelines.

“This will provide us with the resources to finance our infrastructural and industrial development. We are hoping that, at some stage, China will interest itself, and take a part of it as China’s contribution to Ghana’s development,” he told Chinese President, Xi Jinping, during a short ceremony in Beijing.

Shedding light on rare bond on Joy FM’s Super Morning Show, Monday, Kojo Oppong Nkrumah said if implemented, the bond will shore up Ghana’s resources mobilisation drive.

“If you look at the global financial markets all over the world, you are finding two things: They are improving domestic resource like we are doing in Ghana…and we are also looking at finding cheaper, longer-term financing to complement that.

“The Century Bond that has been done in other parts of the world is a good opening. It helps you to refinance some of your short term expensive instruments and gives you more fiscal space. It gives you more resources to stretch over a period to deliver more value,” he said.

Discussions about ultra-long term debts have been fraught with uncertainty due in part to interest rates fluctuations that can lower yields for investors; however, some analysts say there is a growing demand for these types of bonds.

Many of these long-term bonds contain an option that lets the issuer to partially or fully repay the debt before the scheduled maturity.

Kojo Oppong Nkrumah said details of the proposed 100-year bond would soon be made public.

Source: Myjoyonline.com
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