On 15th May 2016, the then Minister of Finance, Seth Terkper, announced the country’s intention to enter the international bonds market with the goal of raising around one billion dollars.
Despite earlier concerns from financial experts about the International Monetary Fund (IMF) withholding approval due to Ghana’s debt levels, the IMF has now given its endorsement for the issuance of Ghana’s 5th Eurobond during its review of the Extended Credit Facility program.
Minister Terkper led a government delegation in a non-deal road show, presenting Ghana’s expanding economic prospects to potential investors.
With parliamentary approval already secured, the government aims to secure additional funds from the global market to bolster the nation’s growing infrastructure requirements and address maturing debts.
While the timing of the Eurobond issuance remains uncertain, Joel Toujas-Bernaté, the head of the IMF mission to Ghana, shared in a press conference that the decision would be influenced by prevailing market conditions.
He emphasized the flexibility of adapting to market fluctuations, suggesting that if conditions are unfavorable at the beginning of the year, the government can utilize existing cash balances.
Toujas-Bernaté reassured that the IMF supports Ghana’s ability to smoothly adapt to changing circumstances without jeopardizing financing for the year.
“The concern about debt dynamic season is driven by the fiscal position. At the start of the year, they can use a large part of these cash balances if indeed the market conditions are not right for issuing a new Eurobond,” he said.
“If the market conditions improve and would make issuance of a Eurobond more attractive, then the strategy may change. And it is here that I think the idea is to adapt to market conditions and the fact that the authorities have this cash,” he explained.