Gov't borrows Ghc17.36bn in 2 months

Government borrowing from the domestic market will hit GHc17.36 billion when it borrows another GH¢1.18 billion on Friday, March 18, 2016.

Last Friday, government borrowed GHc845.81 million through an auction held by the Bank of Ghana (BoG). It comprised GHc588.86 million 91-day bills, GHc187.81 million 182-day bills and GHc68.51 million 2-year notes.

A week before, government borrowed over GHc2.080 billion from both local and foreign investors through the sale of its securities to finance maturing debts and undertake some government projects.

Presently, the 91-day and 182-day T-bills are hovering around 22.60 and 24.63 percent respectively.

Government’s borrowing spree, especially from the domestic market, continues to elicit concerns from analysts and businesses because of its crowding-out effect on the private sector.

Meanwhile, government has still not been able to disclose in real terms how much it has contracted by way of loans to finance its opera¬tions since the last quarter of 2015 till date.

The BoG, at its last Monetary Policy Committee (MPC) meeting, also failed to disclose Ghana’s debt levels from October 2015 till date.

In February alone, government was expected to raise a total of GHc6.03 billion through the Bank of Ghana in securities.

This included GHc3 billion in 91-day Treasury bill, GHc2.1 billion in 182-day Treasury bill and GHc120 million worth of one-year notes. The rest were GHc300 million two-year notes and GHc500m from a five-year fixed rated bond.

According to a circular by the Bank of Ghana, the aggregate borrowing for the month of February 2016 was expected to cover maturities of GH¢5.55 billion.

Between December 2015 and January 2016, the government also borrowed GHc781.918 million on the domestic market.

The securities, which are listed on the Ghana Stock Exchange, were made up of four one-year fixed rated note, two two-year fixed rated note, and a three-year fixed rated bond.

The largest debt instrument issued was a GHc373.2 million three-year fixed rated bond.

According to the last summary of Financial and Economic Data, Ghana’s public debt stock stood at GHc92.2 billion in September 2015, representing 69.1 per cent of GDP.

Domestic debt at the end of December 2015 was GHc38.8 billion, approximately 29.1 percent of GDP.