$2bn Eurobond to Improve Public Infrastructure – Finance Minister

The Minister for Finance, Ken Ofori Atta has told Citi News that savings made from the government’s latest sovereign bond issued, will be invested in improving infrastructure that will, in turn, drive job creation.

The government has raised 2 billion dollars in its first Eurobond comprising ten and thirty-year bonds.

The interests of 7.62 and 8.62 percent, have also been cited as being lower and favourable despite prevailing harsh conditions on the international market.

Ken Ofori Atta stressed the need to channel the resources to high yielding ventures which will address the unemployment situation in the country.

“A couple of the key issues that our government committed to tackle are infrastructure deficit and job creation. The momentum and tempo for rolling out the infrastructure needs and supporting our projects which will create jobs is what we are going to be focusing on, together with the implementing agencies and the other resources that find the resources to back them up.”

The government announced earlier this week that it had secured more than its target for its Eurobond which was closed on Thursday, May 10, 2018,  in London.

The government was seeking to raise 750 million dollars. However, upon completion, the Sovereign bond accrued two billion dollars from investors.

A statement from the Ministry of Finance said the development represents the first time a sub – Saharan country with a rating of B stable has priced a sovereign Bond at such low costs indicating strong investor confidence.

“It is also the first time Ghana has extended its international capital market funding to 30 years,” the statement further said.

The team on the roadshow attributed the response to an improvement in the economic conditions.

“This is a reflection of the improving Ghanaian situation for which reason we are benefiting from lower rates despite recent turbulent activities on the emerging markets front. These cheaper bonds will help us to pay off the expensive ones issued by the previous administration and save mother Ghana money which can be invested in dense job initiatives. Investors have expressed increased confidence in the early turn around signs and have chosen to reward Ghana for it.”

The last five year Eurobond issued in 2016, attracted an interest rate of 9.25 percent.