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Business News of Tuesday, 10 December 2019

Source: Class FM

Government adds GH¢3.75bn to Ghana's debt in Oct, Nov.

The government of Ghana borrowed GHS3.75 billion in the months of October and November 2019, a circular from the Ghana Stock Exchange sighted by reveals.

The borrowings were from the issuance of medium to long term bonds (2-Year Notes, 3-Year Bonds, 5-Year Bonds, 7-Year Bonds and 15-Year Bond).

They have since been listed on the Ghana Fixed Income Market (GFIM) of the Ghana Stock Exchange.

As usual, interest payments are expected to be done semi-annually until maturity.

The yield on the 2-Year Notes was relatively expensive at 19.00 and 19.7 per cent, respectively.

It is unclear how much was used to settle maturing debts and how much was channelled into capital projects. That is expected to give an idea as to how much of the percentage borrowed was in fresh cash.

According to the circular, GHS1.421 billion in 2-Year Notes was the biggest amount issued during the period.

The Coupon Rate or Yield was 19.0, 19.50 and 19.75 per cent, respectively.

The 3-Year Bond followed suit with a total of GHS979.6 million raised at yields of 17.50 and 20.00 per cent, respectively.

GHS498 million at a rate of 19.75 per cent was obtained from the 15-Year Bond, while the 7-Year Bonds issuance attracted a total of GHS437.3 million at yields of 16.25 per cent and 18.00 per cent per annum, respectively.

GHS420 million was received from the issuance of the GHS420 million. The yield-to-maturity was, however, 19.50 per cent.

According to the Bank of Ghana, Ghana’s public debt rose to 60.3 per cent of GDP, about GHS208.6 billion at the end of September 2019 compared with 56.8 per cent of GDP (GHS170.8 billion) at the end of September 2018.

Of the total debt stock, domestic debt was GHS101.4 billion, of which GHS11.2 billion (3.8 per cent of GDP) represented bonds issued to support the financial sector clean-up, while external debt was GHS107.2 billion, with a share of 51.4 per cent in the total public debt.