The government of Ghana has secured GH¢28 million from the issuance of the 56- Day BoG Bill which replaced the 14-day BoG Bill.

The short-term Bill was traded at an auctioned rate of 14.50 percent, however, discounted at a rate of 14.18 percent. Surprisingly, the interest rate and the rate at which the bill was discounted still remained constant from the previous auction. The funds will be loaned to the government by the Bank of Ghana to help it meet its short-term liquidity needs.

In recent weeks, the market has been conditioned favorably by greater demand and lower interest rate expectations. Investor interest in the domestic market, particularly the Bank of Ghana Bills, has increased as a result of this.

BoG to auction US$450 million in the first quarter of 2022

The Central Bank has announced that it expects to generate $450 million from the foreign exchange forward auction to cover its financing needs in the first quarter of this year.

The auction rates to be issued by the Central Bank are expected to fund government projects in the first quarter of this year.

The government posited that it expects the first quarter of the 2022 calendar to suit market participants’ needs, assuring all stakeholders and the general public that it is working to improve predictability and transparency in the market.

On a quarterly basis, the Bank of Ghana will publish an auction calendar for the Foreign Exchange Forward Auction. The calendar will be available on the Bank of Ghana’s website one week before the start of the next quarter. The guidelines for the competitive multiple-priced Foreign Exchange Forward Auction will be published and available on the Bank of Ghana website.

World Bank cautions Ghana over soaring debt levels

The World Bank recently warned Ghana against piling its external debt and exceeding the sustainability threshold. Ghana is currently rated as a moderate to high-risk debt distressed country, according to the bank, and must proceed with caution.

Pierre Frank Laporte, Country Director of the World Bank in Ghana, advised that the country must not exceed the acceptable debt sustainability levels.

“Countries, especially developing countries have to borrow because most of us do not have adequate resources to develop. We have to borrow to develop, but you have to borrow responsibly. At the moment Ghana’s debt situation, based on World Bank’s description, is a country at a moderate rate to high risk of debt distress. So of course, the country has to be careful.”
Pierre Frank Laporte

Mr. Laporte recommended the government to prudently spend the money it borrows, noting that debt is not always a negative thing. He expressed confidence in the debt-management ability of the current administration and urged Ghanaians to remain calm about the situation

“But the country is at a stage where things are critical. I am confident that the Finance Minister and his team are fully aware of that, as we discuss all the time. Borrowing is not a bad thing, but you have to borrow on the right terms, the right amount and in the right way. Countries have debt strategies, so like I said, I am confident that the Ghanaian authorities know what they’re doing.”
Pierre Frank Laporte