Government has dismissed reports that it has abandoned its decision to issue yet another Eurobond this year.
According to Finance Minister, Seth Terkper, government is still considering the various markets and devise strategies to pay off maturing debts.
“What we did was to suspend pricing because considering the money in the stabilization fund and the bonds that were issued last year, we took off the [2016] bond because the prices that we were seeing were not right,” he stated.
Mr. Terkper added that the creation of the sinking fund has rather helped the country to meet some of its debt settlement obligations, adding that he is hopeful government will strike a good deal when market conditions normalize.
“With the stabilization we have been able to create the sinking fund whenever we put a cap on the stabilization fund, in order that we can use it as one of the instruments for tackling our debts problem. We have already used 33 million dollars of the sinking fund to buy securities for the first time Ghana has bought its own bonds on the secondary market,”
“It is this fund that enabled us to suspend pricing we did not call off the 2016 Eurobond as was widely circulated,” he further stressed.
Seth Terkper made the remarks when he addressed this year’s Ghana Economic Forum on Wednesday, August 17, 2016.
Government suspends 2016 Eurobond
Government early this month, suspended plans to issue its fifth Eurobond to raise about 700 million dollars; proceeds of which were to be used to retire the country’s first Eurobond which matures next year.
A statement from the Ministry explained that the decision had been put on hold until such a time that market conditions are right.
Earlier, some economists had warned government will be unable to get a lower rate than its last Eurobond which attracted a coupon rate of 10.75 percent if it fails to issue the bond in the first quarter of this year.
Ghana’s rising debt levels, economic challenges, upcoming elections and huge budget deficit were expected to influence the coupon rate for this Eurobond.
Ghana’s program with the IMF – the Extended Credit Facility program is expected to address Ghana’s high debt levels as well as huge budget deficit but parliament early this week rejected one of the IMF’s conditions – zero financing of government’s budget from the central bank, which was aimed at dealing with the debt levels.
GEF pushes for a Ghanaian owned economy
This year’s Ghana Economic Forum focused on setting an agenda to attain a Ghanaian owned economy.
The Finance Minister among others also intimated the role of the government in creating an enabling environment for private and public sector business to thrive.
Among the key areas he highlighted were plans to improve the country’s infrastructural base as well as making funds available to the private sector by easing domestic market conditions to propel the needed growth in the country.
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