Ghana, one of Africa’s emerging economy which is experiencing numerous attacks from its citizens over large amount of borrowing and increasing debts, is likely to sell about $1.5 billion Eurobonds this year. However, the country is very ready to access additional/alternative funding opportunities.
The move was announced in Accra by Seth Terkper, Ghana’s Minister of Finance. He also added that the country is on the brighter side of issuing the Eurobond and are only holding on for a favorable window. According to the Ministry of Finance, the department is cautious about the increasing high debt associated with taking foreign loans and thus, has recruited three financial transaction advisors (Citigroup Inc., Standard Chartered PLC, and Bank of America Corp.) to assist in the proposed upcoming sale Eurobond due to the high debt associated with taking foreign loans. Additionally, the department has considered multiple options and alternatives including seeking loan from private banks.
As much as selling Eurobond is uncomfortable for Ghanaians, reports from private financial analysts have revealed various notes that shows that Ghana will have to issue the Eurobond to be able to meet its 2016 budget and also result in about $200 million deficit necessary to pay debts.
Again, four of the country’s utility sector is suffering a huge debt. In view, Ghana will sell 2b USD in bonds this year to help curb the debt. About 1.5b USD of accumulated debt will be waived through the profit generated from the transaction of the bond.
According to the chief director of the Petroleum Ministry in Ghana, the country is in negotiations with a number of banks in this accord. Strategically, there is going to be an increase in the prices of petroleum products and a 10% tax on electricity tariffs to generate funds for the debt.