IFC freezes issuance of GHC2 billion bond due to high interest rates

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The high interest rate regime in the country appears to be having serious effects on various sectors of the economy as International Finance Corporation (IFC) has withheld plans to issue its 2 billion cedi bond in Ghana.

The IFC is a member of the World Bank Group and the largest global development institution focused on the private sector in developing countries.

Proceeds from the bond auction were expected to be used to support small businesses in the country.

Also, government recently suspended the issuance of its seven-year bond because of the high interest rates.

Interest rates on short term notes are currently hovering around 25 percent in the country.

Vice President of IFC , Jindong Hua, told Joy Business in the corporation will be monitoring the market to see when it would be appropriate to issue the bond.

"High nominal interest rates stymies the appetite for the private sector to borrow because when plug in 20% or more interest rate to any project profitability becomes difficult", he told Joy Business in Maputo Mozambique.

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