Government has gotten more than the amount it was looking for in its historic 10-year bond with sources saying it had some GHC726 million worth of bid was realized from investors. 

The state, however, accepted GHC438 million which is more than the initial 200 million it was looking for.

This is the first time, the state was issuing a cedi bond that will be paid over a 10-year period.   

Government will, however, be paying an interest of 19 percent on this bond.  

Even though not much has been said about how the state is going to use proceeds of the fund, some financial analysts believe it would be used to support government’s financing needs. 

Others also think that it will be an advance towards clearing part of the TOR debt. 

Government is hoping to raise some GHC60 billion in bonds and treasury bills for this year.  

Also, there are plans to set aside about GHC9.3 billion as interest payment for 2016.  

Senior Finance Lecturer at the University of Ghana Business School, Dr. Lord Mensah tells JOYBUSINESS the 19 percent is too expensive. 

He argued that looking at the fact that the bond is expected to influence the cost of borrowing for the next 10-year government will be paying too much.

Economist Dr. Godfred Bokpin is also of the view that, the 19 percent is too high arguing “if government’s medium term for inflation is projected at 8 plus or minus,  then why should you go ahead to accept 19 percent.” 

Accepting 19 percent he said raises a lot of questions. 

Dr Bokpin quizzed if that could it be that investors are skeptical about the future? 

This is because the essence of giving medium-term outlook is to also guide the market yield  and anchor rates in a certain  direction, he noted.