Ghana: Eurobond issuance tripled to $13.2bn in 2021 – IMANI
Ghana’s Eurobonds issuance tripled from $4.5bn (GHS 36bn) in 2018 to $13.2bn (GHS 105.6bn) by the end of 2021 .
This is per a report brief by policy Think Tank, IMANI Africa on Ghana’s recent return to the IMF.
Per the report, Ghana’s eurobond issuance is the third highest on the African continent following South Africa (2nd place) with $20.6bn in total eurobond issuance and Egypt (1st place) with $37.5bn in total eurobond issuance.
Nigeria and Ivory Coast follows Ghana in 4th and 5th places with total eurobond issuance of $10.7bn and $9.4bn respectively.
The $13.2bn Eurobond issuance, IMANI asserts in its report, forms 17.8% of Ghana’s 2021 GDP.
Ghana’s public debt which currently stands at 78% of GDP as at the end of December 2021, the Think Tank asserts, had 30% of the debt stock coming from commercial creditors, 28% from bilateral sources with 41% from multilateral lenders.
According to IMANI, due to the shift in Ghana’s debt composition from multilateral lenders to commercial lenders, cost of debt has become extremely expensive with interest rates paid on debts having almost tripled since 2018.
Due to the unsustainable nature of the country’s public debt stock coupled with declining foreign reserves, increasing fiscal deficits, rising inflation, significant depreciation of the cedi among others, Ghana has had to request for a bailout programme from the IMF.
Goal requests for engagement with the IMF was initiated by the Finance Minister, Ken Ofori-Atta, following a directive by the President, Nana Akufo-Addo.
Currently, negotiations between both sides are ongoing with some conditionalities to be slapped on the country, expected to be announced after the negotiation talks.
Reportedly, Ghana is seeking for some $1.5bn in financial assistance from the IMF.
Ghana a relapsing IMF intensive care patient
Meanwhile, IMANI Africa, has described Ghana as a relapsing intensive care patient of the International Monetary Fund (IMF).
The assertion of the Think Tank is premised on the country’s continuous request for Extended Credit Facility (ECF) and Extended Fund Facility (EFF) programmes from the Fund.
According to IMANI, Ghana, over the last four decades has been returning to the IMF for the ECF and EFF programmes, an indication that the country is failing to reform or change the structure of its economy, which is the basic objective of the aforementioned IMF programmes.
In a report brief on Ghana’s recent request for a Balance of Payment (BoP) Support Programme from the Fund, IMANI explains that the ECF and EFF programmes are meant for countries with fundamental structural problems.
Such countries, it notes in the report, have protracted BoP problems needing medium-term assistance.
