Government managed to attract about GH¢438 million ($110 million) worth of bids for its first 10-year domestic bond issued recently at an interest of 19 percent.
The bond, which was oversubscribed by over 200 percent, pooled bids to the tune of GH¢726 million, far more than the initial GH¢200 million targeted by government. Expected to mature in 2026, the bond was also open to foreign investors.
According to Seth Terkper, Finance Minister, the move was aimed at issuing long-term security to help manage the country’s debt stock.
The arrangers were Barclays Bank, Stanbic Bank Ghana, as well as brokerage firm Strategic African Securities.
Government announced that the proceeds will be used to retire maturing debt and invested in infrastructure development.
A Bank of Ghana (BoG) summary of Economic and Financial Data says Ghana’s total public debt has hit almost GH¢110 billion as at July this year.
The Central Bank released the data after a meeting on Friday, September 16 to review the health of the Ghanaian economy.
About GH¢5 billion has been added to the public debt since May, this year.
The GH¢110 billion public debt represents almost 66 percent of the total value of the economy.
Almost GH¢61 billion of the debt came from external borrowings while GH¢49.2 billion came from domestic borrowings.
A recent report released by the Bank of Ghana (BoG) on the country’s Economic and Financial Data showed that the cedi depreciated from January to September at 4.1 percent, with the local currency currently trading at GH¢3.96.
According to the data, most commercial banks are still having challenges with Non-Performing Loans.
Average lending rate as at August this year stood at 33 percent, while the banks are lending among themselves at 25.5 percent.
By the end of this year, analysts expect the country’s total public debt to cross the 70 percent mark which will put the country at a precarious position.
<<Print>>