• About
  • Advertise
  • Privacy Policy
  • Contact
Friday, January 27, 2023
  • 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 KotochiebyStephen Kotochie
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

IEA Urges Government To Moderate Expenditures To Create Fiscal Space For The Economy

Loathing The Use Of Coins Has Implications On The Bank’s Inflationary Objective – Governor, BoG

BoG Regulatory Sandbox: Opens From February 13, 2023 To Admit First Cohort of Participants

  • 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

Related Posts

IEA Urges Government To Moderate Expenditures To Create Fiscal Space For The Economy
Economy

IEA Urges Government To Moderate Expenditures To Create Fiscal Space For The Economy

January 26, 2023
Loathing The Use Of Coins Has Implications On The Bank’s Inflationary Objective – Governor, BoG
Banking

Loathing The Use Of Coins Has Implications On The Bank’s Inflationary Objective – Governor, BoG

January 26, 2023
Bank Of Ghana Encourages Innovation In The Financial Services Industry.
Banking

BoG Regulatory Sandbox: Opens From February 13, 2023 To Admit First Cohort of Participants

January 26, 2023
Most Banks Will Be Making Losses From Debt Exchange Programme- Mould
General News

Gold For Oil Is A Cunning Ploy To Enrich Government Players- Former GNPC CEO

January 26, 2023
DDEP: Government To Hold Its Final Consultation With Stakeholders
Economy

DDEP: Government To Hold Its Final Consultation With Stakeholders

January 26, 2023
Debt Cancellation: Ghana’s International Creditors Request for Full Debt Composition
Economy

Debt Cancellation: Ghana’s International Creditors Request for Full Debt Composition

January 26, 2023

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

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.
IMF Compels Government To Sign A ‘Zero-Financing’ Agreement With BoG As A Necessary Condition For Its US$3 Billion Loan
Finance

IMF Compels Government To Sign A ‘Zero-Financing’ Agreement With BoG As A Necessary Condition For Its US$3 Billion Loan

by Priscilla Dziedzorm FiakpornuJanuary 27, 2023
Day 2 of Kwahu Summit 2023: Institutionalizing APD and Dispute Settlement Mechanism Will Be A Turning Point in the History of Africa- Dr. Francis Mangeni
Vaultz Business

Day 2 of Kwahu Summit 2023: Institutionalizing APD and Dispute Settlement Mechanism Will Be A Turning Point in the History of Africa- Dr. Francis Mangeni

by Stephen M.CJanuary 27, 2023
North Korea: Kim’s Sister Condemns U.S Decision To Send Tanks To Ukraine
Asia

North Korea: Kim’s Sister Condemns U.S Decision To Send Tanks To Ukraine

by Comfort AmpomaaJanuary 27, 2023
Ghana Scores C+ in 2022 GCSI, Much Effort Needed To Perform Better This Year
Vaultz Business

Ghana Scores C+ in 2022 GCSI, Much Effort Needed To Perform Better This Year

by Gifty BansahJanuary 27, 2023
LVMH, World’s Biggest Luxury Group Records Huge Sales Amidst Economic Down Turns
Business

LVMH, World’s Biggest Luxury Group Records Huge Sales Amidst Economic Down Turns

by Priscilla Dziedzorm FiakpornuJanuary 27, 2023
NPP Communications Director Deletes Fake NDC Letter Tweet After Backlash
General News

NPP Communications Director Deletes Fake NDC Letter Tweet After Backlash

by Samuel Yeboah OtibuJanuary 27, 2023
IMF Compels Government To Sign A ‘Zero-Financing’ Agreement With BoG As A Necessary Condition For Its US$3 Billion Loan
Day 2 of Kwahu Summit 2023: Institutionalizing APD and Dispute Settlement Mechanism Will Be A Turning Point in the History of Africa- Dr. Francis Mangeni
North Korea: Kim’s Sister Condemns U.S Decision To Send Tanks To Ukraine
Ghana Scores C+ in 2022 GCSI, Much Effort Needed To Perform Better This Year
LVMH, World’s Biggest Luxury Group Records Huge Sales Amidst Economic Down Turns
NPP Communications Director Deletes Fake NDC Letter Tweet After Backlash
Snow
FIND OUT MORE

The Vaultz News

Copyright © 2021 The Vaultz News. All rights reserved.

Navigate Site

  • About
  • Advertise
  • Privacy Policy
  • Contact

Follow Us

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.

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