Ghana’s economy receives thumbs up from investors

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The high investor confidence in Ghana was affirmed once again when the Government’s five-year bond was largely oversubscribed by offshore and domestic investors on Thursday.

Vice-President Kwesi Amissah-Arthur addressing the Iranian delegation at the Flagstaff House in Accra
Vice-President Kwesi Amissah-Arthur addressing the Iranian delegation at the Flagstaff House in Accra

The 440 million Ghana cedis or 137.5 million dollar bond issued by the Bank of Ghana received bids totaling 610 million cedis or 190.2 million dollars from investors, data from Treasury Department of the Central Bank stated.
This is the first five-year bond issued on behalf of government since 2013, and the second in a series of medium-term auctions planned for the first half of this year.
Monies received will be used by the bank to restructure maturing government debts and boost government finances.
In the end, government accepted 201.8 million cedis, 63 million dollars worth of bids at a yield of yield of 21 percent.
“It is huge success, having been oversubscribed, because it shows that in spite of the current economic challenges, investors still have confidence in the economy,” Charles Kwame Amoah of New Generation Investments, a local investment bank told Xinhua over the telephone.
He said the 21 percent yield at which government accepted the bids was also indicative of the commitment to bring down interest rates, which could make market operators follow suit in taming their lending rates.
“The lower percentage of bids accepted by government also indicates government’s commitment to debt sustainability, which is a good signal to the world that government is mindful of its debt situation,” Amoah added.
The government said it would issue up to 1.5 billion of Eurobonds this year, making it the third straight Eurobond issued in the last three years by the government of Ghana.
Meanwhile the Board of the International Monetary Funds (IMF) is expected to approve of a three year program for the country early April which includes a 940 million dollars balance of payment support. Enditem

Source: Xinhua

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