The Minister of Information, Mr. Kojo Oppong Nkrumah has stated that government considers the successful issuance of the recent $3billion Eurobond at record rates as a vote of confidence by the investor community in the resurgence of the Ghanaian economy.
According to him the government’s consideration that this was a vote of confidence was based on three major pillars and the first was that nearly seven times over subscription of Ghana’s request is evidence of the growing global confidence in Ghana’s economic resilience.
Addressing journalists at the Wednesday edition of the bi-weekly media briefings by the Ministry of Information in Accra yesterday, the minister said the global investor community by this over subscription to this magnitude signaled their faith in Ghana’s new ability to churn out very strong returns on investment and consequently service its obligations.
“Additionally, it reflects a robust investor confidence in Ghana’s future economic outlook. During the process the bid exceeded over $21billion when we were only looking for $3billion and you can compare that to the $8billion in bid recorded in 2018 and it tells you how much appetite is growing for investments in Ghana’s money market instruments,” he said.
Mr Nkrumah explained that at $21billion, this was the highest ever booked for bonds in sub-Sahara Africa and that was the first reason why government considers this as a vote of confidence in the Ghanaian economy.
On the second reason, he said such high success coming at the time when the country was exiting the International Monitory Fund (IMF) programme was evident that the global investor community was confident that the managers of the economy were on an irreversible track of stability.
Furthermore, he said government believes this was driven strongly by the Akufo Addo’s administration success at introducing among other things legislations such as the Fiscal Responsibility Act, the establishment of the Fiscal Council and the establishment of the financial stability council.
“All of these we’ve done it to anchor the regained status to remove the endemic risk to macro stability. The third is the credibility of the economic management team which has led Ghana to a successful completion of the IMF programme which derailed under the erstwhile National Democratic Congress (NDC) administration,” he added.
He said the proceeds from the issuance would be utilised for budgetary support key among which are in the areas of infrastructure and the delivery of our growth driving programmes, adding that, “You recall that growth was very low and we have persistently mentioned that we have to invest more money in growth driving initiatives.”
Mr Nkrumah noted that going forward, government was committed to continuing the entrenchment of structural irreversibility to sustain and anchor the macro gains including the strict enforcement of the Public Financial Management Act, implementation of the Fiscal Responsibility Act and the establishment of Fiscal Responsibility Council and the establishment of the Financial Stability Council to monitor fiscal and debt sustainability and financial sustainability respectively.
By Cliff Ekuful