The Ministry of Finance says it may issue a fresh Eurobond of up to $500 million by year end, if market conditions are right.
The government launched a $1 billion Eurobond at a 10.75 per cent coupon rate on October 7, after having initially targeted a $1.5 billion bond at 9.5 per cent.
“We still have an approval from parliament for $1.5 billion for 2015, so if the opportunity presents itself before the end of the year and since it’s part of the budget that was approved we could still go to the market depending on conditions,” Seth Terkper, Finance Minister told the press in Accra.
“If the markets are not favourable we will look for alternative financing and that means that your financing mix changes for the 2016 budget,” he added.
Mr. Terkper explained that a slowdown in China and an expected rate rise by the U.S. Federal Reserve has caused turmoil in emerging debt markets and also squeezed Ghana.
Meanwhile, the Bank of Ghana (BoG) says it has paid a 24.5 per cent yield on a three-year fixed rate bond, up from 23.47 per cent paid on a similar bond in May.
International investors took up 84.09 per cent of the bond and the BoG said it accepted GH¢994.9 million ($262.5 million) in bids for the bond out of GH¢1.35 billion ($399 million) tendered.
“The result shows that there is international interest in cedi-denominated debt after the Eurobond but the yield shows investors are wary of the currency risk,” Sampson Akligoh, managing director of InvestCorp investment bank in Accra, told Reuters.
The cedi has fallen more than 50 per cent in two years, one example of the fiscal crisis the country is attempting to tackle with the help of an International Monetary Fund aid programme.
Ghana was one of Africa’s strongest economies for years due to revenues from its exports of gold, cocoa and oil. But the government estimates growth at 3.5 per cent this year because of lower global commodities crisis and fiscal problems.