As Ghana prepares to hit the international bonds market to raise about one billion dollars, the International Monetary Fund (IMF) has given its blessing to the move for the country to issue its 5th Eurobond.
Prior to the approval, some financial experts have warned that the IMF may not endorse the move due to Ghana’s debt but the Fund during its review of the country’s Extended Credit Facility programme announced its approval of the bond.
Early this year, the Finance Minister led a team of government officials to meet with investors to showcase the country’s growing economic prospects in a non – deal road show. Parliament has already approved government’s move to raise more funds from the international market to support the country’s growing infrastructural needs, and to repay part of its maturing debts.
Even though it is not clear when government will issue the Eurobond, the head of the IMF mission to Ghana Joel Toujas-Bernaté said in a press conference that issuing a Eurobond will be influenced by market conditions.
“The concern about debt dynamic season is driven by the fiscal position. At the start of the year, they can use a large part of these cash balances if indeed the market conditions are not right for issuing a new Eurobond,” he said.
“If the market conditions improve and would make issuance of a Eurobond more attractive, then the strategy may change. And it is here that I think the idea is to adapt to market conditions and the fact that the authorities have this cash,” he explained. He however stated that the Fund will allow Ghana to adapt very smoothly without risking any short fall in financing for the year.