Ghana may commence a road show for its fifth Eurobond next month to raise US$700 million for infrastructure development.
The road show which would be led by Finance Minister, Mr. Seth Terkper will include individuals from government’s economic team and the Governor of the Bank of Ghana (BoG)
[contextly_sidebar id=”7o5YgEflo6yqJINP9ikbkocgzLoFUkdq”]The team is expected to visit investors in the UK and the USA.
Already, some financial analysts have warned that Ghana may attract a high yield due to government’s agitation for funds in an election year.
For instance, Economist Dr. Ebo Turkson has cautioned that government would have to entice investors with higher yields to meet the target.
However, sources say government is targeting below 10 percent at a maturity period of 15 years slightly lower than the last figure it got.
In October 2015, Ghana successfully issued its fourth Eurobond of US$1 billion at a yield of 10.75 percent after an initial target of 8.5 percent.
At 10.75 percent, the yield on the bond was still higher than the previous bonds which had coupon rates of 8 and 8.5 percent.
In all, there are currently four Eurobonds outstanding, with maturity profiles of October 2017 for the first bond of US$531million; August 2023 for the second bond of US$1billion; January 2026 for a third bond of US$1billion and October 2030 for another US1$ billion.
Ghana’s debt stock
There are however concerns over Ghana’s growing debt stock as government continues to borrow.
As at December 2015, Ghana’s total debt stood at US$25.6 billion, according to the Bank of Ghana (BoG).
The data released by the central bank indicated that the debt stock hit 97.2 billion cedis in December 2015 up from the 96.9 billion cedis recorded in November of the same year.
In October, 2015 the total debt was 96.3 billion cedis while in September 2015, it was at 91.6 billion cedis and in August of that same year 94.8 billion cedis.
Per the figures, as at December 2015 the total debt stock of 97.2 billion cedis or 25.6 billion dollars cumulated to 72.9 percent of GDP.
Of this figure the external debt hit 57.8 billion cedis in December, 2015 which is 43.3 percent of GDP.
While in February domestic debt was 39.4 billion cedis making up 29.5 percent of GDP.
In January 2016, domestic debt went up to 40.6 billion cedis making up 25.6 percent of GDP, it however dropped to 39.9 percent in February 2016 making up 25.2 percent of GDP.
By: Lawrence Segbefia /citibusinessnews.com/Ghana