Audio By Carbonatix
Ghana plans to sell its first 10-year local currency bond next month, issuing 200 million cedis ($50.42 million) of debt as part of an effort to borrow over longer periods at lower interest rates, Finance Minister Seth Terkper said on Tuesday.
Terkper said the new bond, the longest maturity ever for cedi-denominated debt, is open to offshore investors. The bonds will target capital expenditure, he said, and the government would no longer use short-term debt for infrastructure projects.
"It's a deliberate policy to open the long end (of debt maturities) in order to ease pressure on our capital expenditure," Terkper told Reuters.
Ghana signed a three-year assistance programme with the International Monetary Fund in April 2015 to restore fiscal balance to an economy dogged by deficits, public debt and high borrowing costs.
Ghana's total public debt stood at 63 percent of gross domestic product in May and is expected to end 2016 at around 70 percent, Terkper said.
The government will also issue fresh five-year bonds worth 1 billion cedis this month to support its finances, the finance ministry said in a debt issuance calendar for the second half of 2016.
It plans to raise 25.27 billion cedis in the second half of 2016, most of which will be used to roll over maturing debt.
It also hopes to issue its fifth Eurobond after it pulled a $500 million sale last month, Terkper said. ($1 = 3.9665 Ghanaian cedis) (Reporting by Kwasi Kpodo; Editing by Joe Bavier, Larry King)
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