• About
  • Advertise
  • Privacy Policy
  • Contact
Friday, July 11, 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’s ability to raise $5 billion from ICM to whet appetite of other African countries

March 29, 2021
Stephen M.Cby Stephen M.C
in Economy, Sub Top Stories, Sub Top Stories2
0
Gov’ts intended 5-year bond issuance, rolled into a 7-year bond

Ghana’s ability to raise $5 billion from the issuance of bonds from the International Capital market (ICM) despite debt concerns may increase the appetite of other countries in the sub-region to explore that option.

Yet, predicated on Ghana’s success in raising its much coveted $5 billion from the international capital market this year. Since Ghana, like other African countries, is struggling with debt burden issues. Should this be successful, will signal to other countries in the region of sustained investor confidence in buying debt instruments from the region.

Ghana is the first country in sub-Saharan Africa to issue a non-conventional bond-type for sale in the international market this year. However, concerns remain mixed among analysts as to whether the country has the capacity to raise the dollar-rated bond sale.

RelatedPosts

Ghana Sinks to 29th in Africa’s Debt Management Rankings – World Bank Blasts Policy Failures

Ghana’s 24-Hour Economy Hinges on Systems, Not Shifts

BoG Set to Slash Policy Rate by Historic 300bps as Inflation Plunges to 13.7%

  • Debt levels may weaken Ghana’s ability to raise $5 billion from the International Market

Ghana is seeking to raise $5 billion from the ICM to support the 2021 budget as well as service outstanding debt repayments. Ghana plans to use $1.5 billion of the total for the 2021 budget and the rest to roll over domestic and international bonds.

Ghana’s zero-coupon bond sales

The dollar-rated bond is a zero-coupon dollar bond with four-year maturity, alongside seven year, twelve-year and twenty-year instruments. Meanwhile, this is the first time ever Ghana is issuing this type of bond- a zero-coupon dollar bond.

Unlike conventional bonds which pay interests, this type of bond sale does not pay interests until the bond matures. So effectively, over the next four years, Ghana would not be liable to make reoccurring interest payments. Investors would therefore receive the face value of their investment plus accrued interest at the bond’s maturity.

This suggests that, the incumbent government would not be burdened over the next couple of years in paying interest costs pertaining to this bond. But would be shifted to subsequent governments.

  • Fitch assigns Ghana’s proposed foreign currency bonds ‘B’ rating

Last week, Fitch Ratings affirmed Ghana’s proposed dollar bond issuance at ‘B’ rating. The Ratings Agency indicated that this rating action was in line with the country’s Long Term Foreign Currency Issuer Default Rating (IDR).

The Ratings Agency cited the rising cost of government’s debt burden, the rather slow medium-term fiscal consolidation framework and imminent fiscal slippages as among reasons for such an outlook on the proposed dollar bond.

Debt burden among African countries

This notwithstanding, if successful, this would serve as a precursor for other African countries to access funds from the international capital markets to support their 2021 budgets; reduce strains on liquidity and finance debt repayment obligations.

West Africa’s largest economy, Nigeria may follow after Ghana, considering its struggle post-COVID. Expectations are that the country would grow by 2% of GDP this year, according to Fitch Ratings.

Already, countries like Kenya have reached a staff-level agreement with the IMF on a three-year, $2.4 billion financing package in efforts to stabilize, help reduce its high debts relative to GDP and to help in its next phase of response to the COVID-19 pandemic.

The region’s average debt-burden hovers around 64% of gross domestic product. That is in the near to medium-term, from an average of 47% in 2015-2019. Expectations are that revenue generation capacity will lag. Although the region’s GDP will rebound this year after it contracted last year.

But, Ghana has not sought debt relief from the IMF yet, and may not at least this year. Although its counterparts in the sub-region have done so in recent times. Nonetheless, Ghana’s debt has peaked into high risk of debt distress levels, as stated by the IMF.

Ghana’s current debt-to-GDP ratio as at year-end 2020 reached 76.1%. And Ratings Agency, Fitch Ratings has pegged Ghana’s debt to rise to 80% of GDP at year-end 2021.

Tags: 2021 budgetbondDebtfiscal frameworkinternational capital marketliquidityMinistry of Financezero-coupon bond
Please login to join discussion
Previous Post

Maximum Respect!- Stonebwoy Shows Gratitude to Shatta Wale

Next Post

Ghana to receive new consignment of the COVAX vaccine- Dr Achiano

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

Dr. Edward Omane Boamah, Police, Military
General News

Defence Minister Rules Out Military Deployment In Ablekuma North, Despite Violence

July 11, 2025
HE President John Dramani Mahama
General News

Mahama Commits to  Fix Port Bottlenecks to Drive 24-Hour Economy

July 11, 2025
Ghana Sinks to 29th in Africa’s Debt Management Rankings – World Bank Blasts Policy Failures
Economy

Ghana Sinks to 29th in Africa’s Debt Management Rankings – World Bank Blasts Policy Failures

July 11, 2025
Edem Lambasts Prince David Osei Over US Visa Policy Remarks
Entertainment

Edem Lambasts Prince David Osei Over US Visa Policy Remarks

July 11, 2025
EC to rerun Ablekuma North; NDC, NPP compete
General News

NPP’s Awuku Warns Of Possible NDC Misconduct In Ablekuma North 

July 11, 2025
Nigeria Rejects U.S. Request On Deportees
Africa

Nigeria Rejects U.S. Request On Deportees

July 11, 2025
Dr. Edward Omane Boamah, Police, Military
General News

Defence Minister Rules Out Military Deployment In Ablekuma North, Despite Violence

by Silas Kafui AssemJuly 11, 2025
HE President John Dramani Mahama
General News

Mahama Commits to  Fix Port Bottlenecks to Drive 24-Hour Economy

by Evans Junior OwuJuly 11, 2025
Ghana Sinks to 29th in Africa’s Debt Management Rankings – World Bank Blasts Policy Failures
Economy

Ghana Sinks to 29th in Africa’s Debt Management Rankings – World Bank Blasts Policy Failures

by Stephen M.CJuly 11, 2025
Edem Lambasts Prince David Osei Over US Visa Policy Remarks
Entertainment

Edem Lambasts Prince David Osei Over US Visa Policy Remarks

by Esther Korantemaa OffeiJuly 11, 2025
EC to rerun Ablekuma North; NDC, NPP compete
General News

NPP’s Awuku Warns Of Possible NDC Misconduct In Ablekuma North 

by Lilian AhedorJuly 11, 2025
Nigeria Rejects U.S. Request On Deportees
Africa

Nigeria Rejects U.S. Request On Deportees

by Lawrence AnkutseJuly 11, 2025
Dr. Edward Omane Boamah, Police, Military
HE President John Dramani Mahama
Ghana Sinks to 29th in Africa’s Debt Management Rankings – World Bank Blasts Policy Failures
Edem Lambasts Prince David Osei Over US Visa Policy Remarks
EC to rerun Ablekuma North; NDC, NPP compete
Nigeria Rejects U.S. Request On Deportees
[/vc_row_inner]

Recent News

  • Defence Minister Rules Out Military Deployment In Ablekuma North, Despite Violence
  • Mahama Commits to  Fix Port Bottlenecks to Drive 24-Hour Economy
  • Ghana Sinks to 29th in Africa’s Debt Management Rankings – World Bank Blasts Policy Failures
  • Edem Lambasts Prince David Osei Over US Visa Policy Remarks
  • NPP’s Awuku Warns Of Possible NDC Misconduct In Ablekuma North 
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.