The Finance Minister, Ken Ofori-Atta has indicated that government may go to the international market to raise about 1.5 billion dollars by end of this month (April, 2018).
This, is despite the International Monetary Fund (IMF) pressing on government to cut the target to 500 million dollars to control the country’s debt stock.
Government had already stated in the budget that it may raise one billion dollars to support its infrastructural plans and also pay maturing debts.
Speaking to journalists, Mr. Ofori-Atta was optimistic Ghana’s recent positive ratings by international credit agencies will help government get a good coupon rate.
“As we suggested, we hope that by the end of April our advisers for the bond will continue with the negotiations.We expect that by the end of April, we should have been successful with this,”.
Mr. Ofori-Atta explained that the issuance was captured in the budget, hence not an unplanned expenditure.
He pointed out that the decision to go beyond the target by 500 million dollars is aimed at optimizing the issuance, since government’s projections show Ghana may get a good coupon rate due the turnaround in the economy.
“I think the fundamentals are right. What we need to understand is that in the budget the appropriations included one billion dollars of sovereign fund financing which is what we are going for. You know the country’s ratings have strengthened and the market conditions are good,” he said adding that previous bonds under the erstwhile Mahama administration lacked such favorable credit ratings hence the high coupon rate.
“So, we look at the number of National Democratic Congress (NDC) issuances in the past years which we feel are too expensive and so given our better credit ratings, we want to use the opportunity to see whether we can swap out some of those up to 1.5 billion dollars”.
Mr. Ofori-Atta maintained that the Finance Ministry is firm on re-profiling government’s debt to give it a long maturity date.
He was of the view that such a move will give government time to spread the old debt to reduce its impact on the economy.