• About
  • Advertise
  • Privacy Policy
  • Contact
Tuesday, July 8, 2025
  • Login
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships
No Result
View All Result
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships
No Result
View All Result
The Vaultz News
No Result
View All Result

Ghana Susceptible to Risk Exposures Borrowing from ICM

January 14, 2021
thevaultzby thevaultz
in Securities/Markets
0
Gov’t initiates processes to borrow $5 billion from ICM

The Ghanaian economy is likely to be predisposed to exchange rate volatility and high interest costs due to the government’s intentions to borrow from the International Capital Markets (ICM) to help finance its activities for the first three months ending March 2021.

The government, indicated last year that it plans to source funding from the capital markets by issuing sovereign bonds of US$3 billion with the option to increase it to $5 billion should market conditions prove favourable, adding that out of the amount, US$1.5 billion would be used to support the 2021 budget and US$3.5 billion for liability management.

  • ​ Economist backs govt’s decision to borrow US$5bn from capital market

Also, the steep increases in government’s borrowing is essential as tax revenues have fallen during the pandemic causing government revenue margins to fall short of both their targets and expenditures.

RelatedPosts

GSE Bulls Charge Back: Energy, Telecom and Financial Stocks Lead Market Rebound

GSE Poised for Sustained Momentum in H2 2025 – Market Expert Projects Further Gains

Ghana Stock Exchange Shatters Records with Over GHS1 Billion Trading in a Single Day

Moody’s credit rating agency intimated that when the government borrows, it drives its liquidity up, however, with the current global crises and economic devastation wrought by the coronavirus pandemic, there is a possibility of a heightened exposure of the Ghanaian economy to international capital flow reversals (i.e sudden stop in capital flows) which occurs when foreign financing available to borrower countries unexpectedly dries up.

When this happens, the country may be faced with exchange rate volatility which are risks associated with unexpected movements in the price of the Ghana cedi against other foreign currencies and high borrowing cost, hence, the government would have to pay more to finance its debt stock making it difficult to cover its record budget deficits.

It must be noted that the government intends to borrow such monies to fund its maturing debts and manage its liability, hence, it’s important for the government to be cautious of such exposures in order to realise its objective for borrowing on the International Capital Markets.

The International Credit Rating Agency raised concerns about the fiscal strength of the Ghanaian economy, saying that the country’s fiscal state is one reflective of an “elevated debt burden and weak debt affordability metrics in addition to the prospect of further contingent liabilities materializing in the energy sector”.

Ghana’s debt burden reached 71 percent of Gross Domestic Product (GDP) at end- September 2020, one of the highest recorded in the country’s history breaching some sustainability thresholds, the Bank of Ghana Governor, Ernest Addison said.

Moody’s further asserted that the institutions and governance strength reflect an improved fiscal governance framework, balanced by recurring revenue underperformance against budgeted targets.

Ghana Susceptible to Exchange Rate Volatility Borrowing from ICM

However, the renowned rating agency went on to say that the credit profile of Ghana reflects economic strength, which “balances strong growth potential against small scale and low but growing wealth levels“.

Finally, the International ratings agency, Moody’s has completed a review of Ghana’s ability to raise money on the international capital market, and has ranked Ghana’s long-term local and foreign currency issuer and foreign currency senior unsecured bond ratings at B3 as at December 14, 2020.

This implies that the nation could borrow with little difficulty on the international capital market, however, the government must be mindful of the repercussions on the economy and be modest in its expenditures.

Tags: BondsInternational Capital MarketsMoody’s Investors Service
Please login to join discussion
Previous Post

Develop a synthesis to summarise all items negotiated under AfCFTA – NANTS

Next Post

Supreme Court Adjourns Election Petition Hearing

Sign up for The Vaultz analytic wire

Get weekly news analysis from top editors at The Vaultz and stay informed on trending economic and business issues from across the globe.

Related Posts

Ghana, Korea Forge Stronger Climate Alliance to Drive Sustainable Growth
Extractives/Energy

Ghana, Korea Forge Stronger Climate Alliance to Drive Sustainable Growth

July 8, 2025
Mark Badu-Aboagye, Economy, Cost
Economy

24-Hour Economy Policy Alone Not Enough – GNCCI Warns

July 8, 2025
Darfur Groups Stall Cabinet Over Power-Sharing Demands
Africa

Darfur Groups Stall Cabinet Over Power-Sharing Demands

July 8, 2025
Richard Kumadoe, a seasoned Security Consultant
General News

Triad of factors Driving Ghana’s Fight against Crime

July 8, 2025
Trump Rebuffs Putin’s Offer To Aid Israel-Iran Conflict Mediation
USA

Trump Cranks Up Tariff Blitz

July 8, 2025
DIHOC Inaugurated to aid industrialization
General News

DIHOC Inaugurated To Power Ghana’s Defence Drive

July 8, 2025
Ghana, Korea Forge Stronger Climate Alliance to Drive Sustainable Growth
Extractives/Energy

Ghana, Korea Forge Stronger Climate Alliance to Drive Sustainable Growth

by Prince AgyapongJuly 8, 2025
Mark Badu-Aboagye, Economy, Cost
Economy

24-Hour Economy Policy Alone Not Enough – GNCCI Warns

by Silas Kafui AssemJuly 8, 2025
Darfur Groups Stall Cabinet Over Power-Sharing Demands
Africa

Darfur Groups Stall Cabinet Over Power-Sharing Demands

by Lawrence AnkutseJuly 8, 2025
Richard Kumadoe, a seasoned Security Consultant
General News

Triad of factors Driving Ghana’s Fight against Crime

by Evans Junior OwuJuly 8, 2025
Trump Rebuffs Putin’s Offer To Aid Israel-Iran Conflict Mediation
USA

Trump Cranks Up Tariff Blitz

by Comfort AmpomaaJuly 8, 2025
DIHOC Inaugurated to aid industrialization
General News

DIHOC Inaugurated To Power Ghana’s Defence Drive

by Lilian AhedorJuly 8, 2025
Ghana, Korea Forge Stronger Climate Alliance to Drive Sustainable Growth
Mark Badu-Aboagye, Economy, Cost
Darfur Groups Stall Cabinet Over Power-Sharing Demands
Richard Kumadoe, a seasoned Security Consultant
Trump Rebuffs Putin’s Offer To Aid Israel-Iran Conflict Mediation
DIHOC Inaugurated to aid industrialization
[/vc_row_inner]

Recent News

  • Ghana, Korea Forge Stronger Climate Alliance to Drive Sustainable Growth
  • 24-Hour Economy Policy Alone Not Enough – GNCCI Warns
  • Darfur Groups Stall Cabinet Over Power-Sharing Demands
  • Triad of factors Driving Ghana’s Fight against Crime
  • Trump Cranks Up Tariff Blitz
The Vaultz News

Copyright © 2021 The Vaultz News. All rights reserved.

Navigate Site

  • About
  • Advertise
  • Privacy Policy
  • Contact

Follow Us

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2D
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships

Copyright © 2021 The Vaultz News. All rights reserved.