The debt management division of the Ministry of Finance must draw up a plan to arrest the surge in exchange rate volatility before issuing this year’s 1 billion dollar Eurobond.
[contextly_sidebar id=”J2dDapoR5zLHHN8s760kYotdt0TA3PDI”]This is according to the head of the finance department of the University of Ghana Business School Dr. Godfred Bokpin.
The International Monetary Fund (IMF) in its latest World Economic Outlook is warning sub-Saharan African countries including Ghana, to put in place contingency plans before issuing Eurobonds this year because it envisages possible surges in exchange rates volatility.
“it is largely expected because of the volatility in the foreign exchange market and also because of the composition of our public debt . almost 24% of our public debt is external and if you take this 24% almost 48% of our external debt as at march 2014 was denominated in the US dollar , with 28% in SDR (special drawing right) “, Dr. Bokpin stated.
The consistent slide in commodity prices including oil, gold and cocoa has exposed Ghana because the country’s foreign earnings don’t properly align to the foreign component of the public debt.
However Dr. Bokpin says government has no option than to issue the Eurobonds to retire debts which would mature in 2017 as well as fund capital projects.
Government has confirmed to Citi Business News that it will issue the 1billion dollar Eurobond by June this year.
By: Rabiu Alhassan/citifmonline.com/Ghana