The government of Ghana has planned to issue fresh bonds to the tune of GH¢2.1 billion between June and August this year to meet government’s financing requirements. This is according to the government’s issuance calendar for June to August, 2021. Meanwhile, majority of the bonds that government plans to issue within the period will be used to rollover maturities.
“Government plans to issue a gross amount of GH¢21,960.00 million, of which GHȼ19,864.43 million is to rollover maturities. The remaining GH¢2,095.57 million is fresh issuance to meet Government’s financing requirements”.
Comparatively, the current fresh bond issuance for June to August is lower than the GH¢4.13 billion issued between April and June 2021. However, the current target gross bond issuance of GH¢ 21.96 billion is higher than the GH¢21.43 billion issued between April to June 2021
June to August Calendar
Meanwhile, the issuance calendar shows that the government will issue GH¢11.2 billion through the 91-day Treasury bills. Also, it will mobilize GH¢1.7 billion via the issuance of the 182-day T-bills. Unlike, the April to June calendar where government issued GH¢1.57 billion from the one-year bill, there will be no such bills in the current calendar.
Nevertheless, the government plans to raise GH¢1.2 billion from the issuance of the 2-year securities. Also, the government wants to raise an amount of 1.8 billion each from the 3-year, 6-year and 7-year securities. Moreover, the government plans to raise GH¢1.0 billion through the issuance of the 10-year bond.
Cumulatively, the government wants to raise a total of GH¢6.70 billion from the issuance of the various type of securities in June. This amount is expected to increase to GH¢8.13 billion in July 2021 and in August, the government targets a total amount of GH¢7.13 billion.
The June to August 2021 Bond issuance calendar further shows that the government will issue the 91-day and 182-day weekly. On the contrary, it will issue the 364-day bill bi-weekly through the primary auction.
Meanwhile, the government plans to issue securities above two years through the book-building method. This is consistent with the Medium Term Debt Management Strategy (MTDS). Nevertheless, the government hinted that it may announce tap-ins/reopening of other existing instruments depending on market conditions.
Transparency in domestic bond market
Furthermore, the government gave the assurance to stakeholders and the general public that it will ensure greater predictability and transparency in the domestic bond market. Is also hinted that it will update the issuance calendar on a monthly basis to reflect the full quarter financing program.
According to the Ministry of Finance, the publication of the Issuance Calendar is part of government’s efforts to improve market transparency in the issuance of its securities.
The Ministry further stated that the government developed the Calendar based on two important national documents; the Net Domestic Financing provided in the 2021 Budget Statement and the MTDS for 2021-2024. MoF further explained that the calendar depicts securities that are intended to be issued in respect of Government’s Public Sector Borrowing Requirements for the period.
Additionally, the Ministry noted that the Calendar takes into consideration Government’s liability management program and market developments (both domestic and international). It also considers the Treasury & Debt Management objective of lengthening the maturity profile of the public debt.
However, the Ministry cautioned that “the amounts stated in the Calendar are indicative, to guide the market and may be revised when transaction adverts are published”.