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Business news for Wednesday, March 10, 2021
Source: thebusiness24.com.gh
2021-03-10
Finance Minister Appointed, Ken Ofori-Atta
The government has started the process to entrust senior managers with issuing Eurobonds this year under the 2021 International Capital Market (ICM) Financing Program.
The Finance Ministry in a statement revealed that the government is in the process of ordering Bank of America, Citi Bank, Rand Merchant Bank, Standard Chartered Bank and Standard Bank as lead managers under the program.
“One of the key mandates for banks is to advise the government on various alternative financing structures and options, especially for Eurobonds, that better match Ghana’s financing requirements and provide fiscal capacity to further support revitalization and expansion. economic recovery at this time, “said the Ministry.
This year’s ICM program is targeting up to US $ 5 billion to support growth-oriented spending in the 2021 budget and to carry out liability management of outstanding Eurobonds and domestic bonds. The instruments of the program consist of Eurobonds, Diaspora Bonds, Sustainable Bonds, and Syndicated or Bridge Loans.
The president’s candidate for Finance Minister Ken Ofori-Atta told Parliament last year that of the total $ 5 billion to be raised, $ 1.5 billion is planned to be used to support the 2021 budget and $ 3.5 billion to meet government spending. debt obligations.
If the government raises US $ 5 billion in the international capital market, it would be the highest value of Eurobonds issued by the country since its first year in 2007.
Market analysts have indicated that to increase investor appetite for the planned issuance, the government must signal a strong intention to revive economic growth and domestic revenue collection, both of which were hit by the impact of COVID-19.
There has been a tightening of spreads for Ghanaian Eurobonds since June last year, and the prevailing conditions are favorable as there is an increase in risk appetite from investors in the global bond market.
Analysts have also said that conditions can be further improved if the government signals its intention in the 2021 budget to compress the fiscal deficit and reduce the risk to debt sustainability.
Ghana’s total public debt stood at 74.4 percent of GDP in November 2020.
