Last year government’s borrowing escapade saw it rake about GH¢50 billion for the year through its Issuance Calendar for its Securities.
A large chunk of the money borrowed was used to pay back loans it contracted from resident and non-resident investors which had matured.
This year, government has begun the borrowing cycle with an amount of GH¢30.47 billion expected for the first half from same sources through the issuance of bonds, notes and Treasury bills.
According to government’s issuance calendar for the first half of this year, which is in reference to the Medium Term Debt Strategy (MDTS) that details the total amount of money to be borrowed, forecast maturities would make up GH¢27,779.00 million of the amount to be borrowed while net issuance would total GH¢2,951.00 million.
For this month alone, GH¢2,100 million is scheduled to be collected via the 91-day T-bill, with GH¢1,700 million planned to be received from the182-day T-bill. Also, some GH¢120 million would be contracted via the 1-Year Note, GH¢300 from the 2-Year Note, GH¢500 million from the 3-Year bond and a yet-to-be specified amount from the 5-Year Fixed Rate Bond.
A government document on the schedule noted: “We believe that the combination of an overall plan for the half year and a more accurate detailed monthly borrowing plan presented well in advance, should meet the requirements of market participants as it will ensure greater predictability and transparency”.
An auction is slated for today, 7th January, 2016 for the GH¢500 million 3-year bond which will be Ghana cedi-denominated and issued at par.
Each bond shall have a face value of one Ghana cedi and the minimum bid is GH¢50,000 and multiples of GH¢1,000 subsequently. Settlement shall take place on 11th January, 2016.
The bond shall be redeemed by the issuer on the maturity date which is 7th January, 2019.
Meanwhile, Mike Cobblah, an investment analyst, who spoke to Joy News on government’s borrowing plans, expressed apprehension that the new string of borrowings was likely to crowd out private businesses and increase the public debt.
He prayed that the development would culminate in the reduction in the public debt since majority of the debts would be channeled into that.
Every week, the Bank of Ghana, on behalf of Government, borrows huge sums of money from resident and non-resident investors to service government borrowings.
For the second half, it is expected that the amount to be borrowed would hover around the same figure planned for the first half and bring the total amount to a little over GH¢60 billion, a GH¢10 million difference from what pertained last year.
Last year, government’s total public debt totaled GH¢94.5 billion under the supervision of Finance Minister Seth Terkper.
By Samuel Boadi