The Governor of the Bank of Ghana, Dr. Ernest Addison has downplayed fears that government’s decision to issue a 15 year bond to clear the energy sector debt will increase Ghana’s debt stock.
Vice President Dr. Mahamudu Bawumia told Citi Business News recently in Washington DC during the Spring Meetings that government will issue the bond to restructure the 2.4 billion dollars debt in the energy sector.
With Ghana’s debt stock at 127 billion cedis, some financial observers have advised government not to add on to the debt.
Reacting to a question during the announcement of the Policy Rate, Dr. Addison stated that the method that may be used will not add on to the debt.
“It depends on how it is done if it is issued as a government debt then it will become part of the stock of debt that compute, on the other hand from what I understand it will done through the special purpose vehicle and used the ESLA payment to service that debt, so if that is done then it might not necessary be part of the government”, he explained.
Dr. Addison maintained that it is important for the debt to be cleared to provide some space for the banks.
He was of the view that the bond may rather restructure the debt and give major state owned power companies a clean sheet to invest.
By: Lawrence Segbefia/citibusinessnews.com/Ghana