New bond auctions will not result in drastic debt stock increase - Finance Minister

New bond auctions will not result in drastic debt stock increase - Finance Minister
Source: Ghana | | Joy Business
Date: 01-06-2017 Time: 08:06:21:pm

Finance Minister Ken Ofori Atta is insisting that fresh bonds being issued will not result in a drastic increase in the debt stock.

The assurance follows criticisms the three-year bond that would be sold this week together with the 10-year energy bond, would balloon the public debt, which has reached GHS127 billion.

But speaking to JOYBUSINESS on the sidelines of the World Bank Development Finance Forum in Accra, the Finance  Minister said what government is doing would rather end up reducing the debt stock.

Government should by the end of first half of this year raise almost GHS40 billion in bonds and treasury bills. About GHS30 billion of this amount would be advanced towards financing existing debts, with the remaining acting as buffers for government.

Seeking a transaction adviser for 10-year Energy Bond

In a related development, the Finance Ministry is inviting proposals from any financial institution to act as a transaction adviser for the proposed 10-year bond energy bond.

According to the Ministry, the institution should be licensed by the Securities and Exchange Commission (SEC) and it’s expected to facilitate the processes leading to the issuance of a cedi denominated long-term bond to refinance the estimated GHS10 billion to clear the legacy debt in the energy sector.  

Proceeds from the issuance will be utilised to repay the outstanding obligations of the sector.

The successful execution of this transaction and issuance of a bond will enable the governor put the sector back on a strong financial footing as part of steps being taken to comprehensively resolve the energy sector challenges in a sustainable manner.

Industry Responds

Chief Executive of the Chamber of Bulk Oil Distributors Senyo Hosi has welcomed the move saying it would go a long way to putting the industry back on strong footing since this debt has been lingering on for a long time.

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