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.
Latest Stories
-
Blame Parliament for SALL disenfranchisement, not EC – Bossman Asare tells IMANI Africa
7 mins -
Inflation to decline much faster in May 2024 – Report
23 mins -
Slovak PM Robert Fico carried to car after being shot
43 mins -
We need stakeholder engagement, not firefighting approach – CDD-Ghana fellow tells government
51 mins -
Fitch revises outlook on Zenith, Access, 3 others to positive
53 mins -
WAFU B U-17 Cup of Nations: Black Starlets thump Côte d’Ivoire in Group A opener
1 hour -
AngloGold Ashanti delivers steady start to 2024; Gold production up +2% year-on-year
1 hour -
Fidelity Bank joins forces with Proxtera to empower Ghana’s SMEs on GIFE Platform
1 hour -
Five men accused of murdering South African rapper AKA denied bail
1 hour -
GH Queens reality show secures win for Ghana at AMVCA 2024
1 hour -
Over 400 Deloitte Ghana staff mark ‘Volunteer Day’ to impact about 12,000 school children
1 hour -
ECG commences skills development programme to address unemployment
1 hour -
Assessing economic effect of perennial flooding in Ghana
2 hours -
GPHA condemns clash between its security personnel and Immigration officers at Tema port
2 hours -
Ato Forson accuses Akufo-Addo of turning NIB into NPP foot soldiers hub
2 hours