Eurobond ditch shows lack of confidence in the economy

The Minority spokesperson on Finance Dr Anthony Akoto Osei has said investors decision not to purchase Ghanas Eurobond shows a lack of confidence in the management of the economy.

The government will monitor markets and revive the sale “at the optimal time and the right conditions,” the Finance Ministry said in a statement on Thursday after concluding investor meetings in the U.K. and U.S. It also capped a buyback tender for $500 million of 2017 notes at $100 million, Bloomberg reported on Thursday.

The "Government will continue to build on this dialogue with international investors, while monitoring the markets and the IMF Board process with respect to the Third Review of the Program and will issue new notes at the optimal time and the right conditions,"the statement added.

However, Dr Akoto-Osei in an interview with Citi FM noted that “the negotiations with IMF are not finished and most investors look at that as a signal about the health of your economy.”

“When investors want to price risk that high for your country, it is an indication that there is some credibility problem," he added.

An emerging-markets economist at Standard Life Investments Ltd. in London,Nicolas Jaquier, told Bloomberg "the timing of the new issue was a bit puzzling, coming to issue a bond just before some of the pending issues with the IMF were being ironed out. That’s what kept many investors away.”

The government had to ditch its last Eurobond issue of $750 million in February 2016, describing it as ill-timed.

However, Jacquier said investors staying way is not "an entire surprise."