Govt Borrowed GH¢1.57bn In Notes Alone In May

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Ghana borrowed GH¢1.578 billion in notes and bonds alone in April and May 2016, according to a circular from the Ghana Stock Exchange (GSE).

This however excludes 91-day and 182-day Treasury bills. But in April 2016, GH¢2.0 billion and GH¢1.7 billion were issued as 91-Day and 182-Day Treasury bills

According to the circular, the nation borrowed GH¢99.625 million through issuance of a 1-year note and GH¢52.197 million from 2-year note. GH¢1.426 billion was however raised from two 3-year bonds which one attracted more than GH¢1 billion.

While the 1-year note attracted a yield of 23 percent, the 2-year note attracted an interest rate of 24.00 and 24.05 percent respectively. That of the 3-year bond attracted a yield of 24.50 percent.

According to the circular, interest payment will be done half yearly form the date of issuance.

Excluding the 1-year note, the instruments were opened to both foreign and local investors.

In April 2016, GH¢2.0 billion and GH¢1.7 billion were issued as 91-Day and 182-Day Treasury bills.

A total of GH¢6.03 billion was also raised by the Government of Ghana through the Bank of Ghana in securities alone in February 2016.

According to the Bank of Ghana, Ghana’s total public debt stock hit GH¢99.9 billion at the end of December 2015, approximately 72.9 percent of GDP. External debt alone was GH¢57.8 million.

However, Business Finder analysis of government borrowing indicates that the nation’s public debt stock now stands at GH¢117.3 billion.

It is believed government added about GH¢17.36billion to the debt stock by the end of the first quarter of 2016.

Meanwhile forecast from the Economist Intelligence Unit (EIU) has revealed that Ghana’s debt-to-GDP ratio will hit 75.8 per cent of GDP by the end of 2016.

This means the country’s total public debt stock will hit GH¢126.6 billion by the end of this year. Furthermore, the EIU is estimating a lower real GDP growth rate of 3.6 per cent, from the 5.2 per cent (non-oil) target in the 2016 budget.

Analysts say the debt stock level will undoubtedly increase Ghana’s already high risk of debt distress and further throw its fiscal consolidation programme out of gear

 

Source: The Finder

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