IMF: Ghana struggling to meet financing costs

The IMF has expressed renewed concerns over Ghana’s deteriorating debt situation.
According to the Fund, “Ghana is at high risk of debt distress and faces exceptionally high gross financing needs”.
In an exclusive email conversation with Business Finder, the fund recommended a change in the country’s borrowing strategy, to consider changing market conditions when assessing alternative debt instruments.
An IMF spokesperson pointed out that to support government’s aim at a primary surplus for 2016 which is set to bring the debt to a downward trajectory, the fiscal deficit will also need to be financed at the lower cost, taking due account of the risks.
The Fund reminded government that “recently, yields on Ghana’s Eurobonds have increased to above double digits, making this borrowing option very expensive.”
This warning is timely as government prepares to go to another roadshow in April this year to convince investors to subscribe to its fifth Eurobond.
Ghana earned an astronomical 10.75% yield on the fourth Eurobond issued last year for $1 billion, a move that was criticized by analysts as too expensive.

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Posted by admin on Apr 12 2016. Filed under African News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry