Ghana Plans First International Sale of Bonds

Feb. 20 (Bloomberg) -- Ghana, Africa's second-biggest gold producing country, plans its first international sale of bonds to help spur a market for corporate debt.

The West African government is seeking to raise as much as $500 million, said two bankers in London who were asked to submit proposals for organizing the sale. Ghana is likely to choose arrangers next month, said the bankers who declined to be identified because the discussions are private.

African countries are attracting investment from bondholders as commodity prices near the highest on record boost economic growth and international agencies write off official debt. Guaranty Trust Bank, Nigeria's biggest lender, last month raised $350 million in the country's first international bond offering.

``Some African nations are benefiting from a double effect,'' said Veronica Kalema, who assigns credit rankings for Middle East and African governments at Fitch Ratings in London. ``The economies are being better managed and commodity prices are high.''

Kenya may sell bonds this year, Richard Fox, Fitch's head of Middle East and Africa, said at a conference last month.

Ghana's $10 billion economy will probably grow 6.5 percent this year after an estimated 6.2 percent expansion in 2006, Finance Minister Kwadwo Baah-Wiredu said Nov. 16. Growth is being driven by surging prices in the past year for its two main exports, gold and cocoa.

Central bank spokesman Esi Hammond, based the Ghanaian capital Accra, wasn't immediately available to comment.

Debt Forgiveness

Most Ghanaians live on less than $500 a year, based on data collected by Central Intelligence Agency in Washington. It's one of 18 of the world's most indebted and impoverished nations that were included in a Group of Eight program to cancel $40 billion of debt.

The International Monetary Fund forgave $383 million owed by Ghana last year. Government debt dropped to 42 percent of gross domestic product last year from 70 percent in 2005, according to data compiled by Fitch.

The ratings firm on Feb. 1 raised the outlook for Ghana's long-term foreign currency debt to ``positive.'' The government is ranked B+ by Fitch, four levels below investment grade.