Government to borrow ¢22.1bn in 4th quarter of 2020
Government will borrow an amount of ¢22.1 billion within the half-moon of this year. In December 2020 alone, ¢11.3 billion are going to be raised from both short and future financial instruments.
According to the Bank of Ghana issuance calendar, ¢19.6 billion are going to be wont to settle principal and interest [rollover maturities] of existing loans. ¢2.5 billion fresh issuance will, however, be wont to finance government projects.
Government in September had prearranged to borrow ¢22.7 billion between September and November 2020. Out of that, ¢3.05 billion was projected to be fresh issuance. Out of the entire amount to be raised in quarter four 2020, ¢9.7 billion which is that the highest amount, are going to be issued via a 91-day Treasury bill, the calendar shows.
The lowest amount to be raised is ¢287 million which can be done through a 20-year bond. The 20-year bond was originally scheduled to be issued in November but had to be pushed to December due to the present market conditions.
According to the Finance Ministry, the 91-day and 182-day Treasury bills will be issued every week, whiles the one year Treasury note will be floated every fortnight. This will, however, be done through the first auction with settlement being the transaction date plus one working day.
Securities of two-year up to seven-year will, however, be issued through the book-building method. Where a pricing guideline are going to be set. The additional ¢2.5 billion will add up to government’s total debt of ¢263 billion as of July 2020.
World Bank cautions nation against rising debt
The World Bank in its latest October 2020 Africa Pulse Report. It projected a big rise in Ghana’s total debt for this year. According to the Bretton Wood institution, this is often thanks to the widening fiscal deficit as a results of lower revenue and high expenditure caused by covid-19.
The country’s debt hit ¢263 billion, about 68.3% of Gross Domestic Product in July 2020. Ghana still remains a high-risk debt distress country, consistent with the planet Bank’s analysis. Neighbouring Ivory Coast is, however, classified as having moderate debt levels and within the moderate risk category.
Government to borrow ¢22.1bn in 4th quarter of 2020
Source: ghanaweb
