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Business News of Thursday, 1 August 2013

Source: Graphic Business

Ghana receives $750m Eurobond this month

Seven hundred and fifty million dollars from the $1 billion Eurobond that Ghana raised from the international capital market is to be lodged in the country coffers this month.

A Deputy Minister of Information and Media Relations, Mr Ibrahim Murtala Mohammed, who made this known yesterday at the Flagstaff House, said the money would be used for infrastructural development.

He mentioned the Ghana Gas Infrastructure Project at Atuabo in the Western Region as one of the projects to be funded from the $750 million. He said the remaining $250 million would be used to service part of the $750 million bond raised in 2007.Ghana's second bid to raise $1 billion from the international capital market was over-subscribed by $1.2 billion.

The first bond of $750 million was raised in 2007 with a coupon rate of 8.5 per cent and a maturity period of 10 years. The current bond of $1 billion has a maturity period of 10 years, with a coupon rate of 7.87 per cent, to be paid semi-annually.

The Ministry of Finance and Economic Planning has since signed the final agreements on the $1 billion Eurobond with Dentons, the external legal advisors on the country's second Eurobond issue. The documents signed were the subscription agreement, Deed of Covenant, Paying Agency Agreement, Unrestricted and Restricted Global Note, Citi Exchange Agency Fee Letter and the Citi Paying Agency.

In his remarks last week, President John Dramani Mahama welcomed the oversubscription of the country's Eurobond, and said the government would invest the money in managing and growing the economy.

He said the money would be used to reduce the budget deficit, lower interest rate and inflation. One hundred and fifty seven road projects across the country are to be funded from the $1 billion Eurobond.

Besides, the government would use part of the money to build infrastructure in all the 46 new districts. Speaking generally on revenue mobilisation, Mr Murtala Muhammed said the government had increased revenue generation.

He did not give the figures but indicated that the revenue generated was huge. The deputy minister attributed the increased revenue generation greatly to the work of the Presidential Task Force on Revenue Mobilisation and the reduction in government's expenditure.

Through the work of the task force, the government is able to raise about GHc 60,000 every two weeks. Meanwhile, Mr Murtala Muhammed said the government was putting in measures to facilitate the clearing of goods at the Tema Port.

For instance, he said, results of sample tests conducted at the Food and Drugs Authority could be faxed to the port instead of sending them by transport.

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