The Ministry of Finance has stated that the Government of Ghana does not intend to assess the International Capital Market (ICM) again this year to raise any extra funds to finance its expenditures.

According to the Ministry of Finance, the decision not to seek extra funds from the ICM anchored heavily on the recent SDR allocation to the country and the strong international reserve position.

“…Given the current market conditions, strong reserves position, the recent US$ 1.007 billion SDR allocation and the relatively stable currency, the Government of Ghana does not intend to access the international capital markets again this year”.
Ministry of Finance

The Ministry of Finance provided details on its external borrowings as has been approved by the Parliament of Ghana for the 2020/21 fiscal year. According to the MoF, Ghana initiated its 2021 International Capital Market Program for the issuance of sovereign bonds in the last quarter of 2020.

Subsequently, Parliament on 10^th November 2020, granted Government approval to issue bonds amounting to US$3.00 billion, of which proceeds of up to US$1.5 billion was to be applied to support the 2021 budget and growth expenditures. MoF revealed that the balance was to be used for reprofiling domestic debt and liability management purposes.

Parliament also approved a further issuance of up to US$ 2.0 billion, for liability management purposes and reprofiling of domestic debt, should market conditions prove favorable, MoF said.

In March 2021, Ghana successfully issued bonds worth US$3.025 billion comprising the first 4-tranche Eurobond which included an innovative zero-coupon bond, under the 2021 ICM Programme. According to MoF, the 4-tranche transaction was executed after a three-day virtual roadshow with a series of fixed income meetings with investors mainly domiciled in North America and Europe.

Sustainable Financing Framework

To streamline its capital market participation, the Ministry of Finance has developed a Sustainable Financing Framework to guide future capital markets issuance. MoF highlighted that it has developed the framework based on feedback received from various investor engagements, including the roadshow meetings in March this year.

“The Ministry is pleased to report that the Framework, including the Second Party Opinion (SPO), has now been published on the Ministry’s website. It should be noted that publishing the Framework does not imply any new issuance under the ICM Programme. The intention of publishing the Framework is simply to allow our investors and stake holders to review its contents and be guided by it”.
Ministry of Finance

The Framework provides the Government of Ghana, through the Ministry of Finance, the criteria to screen programmes and projects with sustainable, green and/or social credentials that may require financing from the National Budget.

The Ministry of Finance detailed that the Framework recommended that any Environmental, Social, and Governance bonds (ESG) related issuances should fall under two (2) broad categories of Sustainable Financing Instruments. The first is those that will finance or re-finance eligible green and social projects and expenditures (Green, Social and Sustainability bonds). The second category comprises those that are linked “to our performance versus our targets on certain defined KPIs (Sustainability Linked Bonds)”.