Ghana's Eurobond Investors have not rejected Eurobond, Terkper says

Finance Minister Seth Terkper has explained that investors have not ditch Ghana's Eurobond. According to him, Ghana would not borrow at 'any price."

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Seth Terkper

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Finance Minister Seth Terkper has disputed reports that investors rejected Ghana's Eurobond, clarifying that Ghana is not prepared to issue bond at "any price."

READ MORE: Eurobond ditch shows lack of confidence in the economy

"It is important to note that investors have not rejected the bond and that the exercise has not yet been scrapped," Terkper said in a newspaper interview. "The current position is that there is a pause in 'pricing; the bond because of the government's stance that it will not refinance at any price."

On Thursday, August 7, Bloomberg reported that investors have ditched Ghana's fifth Eurobond over fears government may not be able to prudently manage the economy ahead of a crucial election on December 7.

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.”

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

However, Terkper told the state-run Daily Graphic Newspaper that a similar strategy was adopted in 2015 when the price on the international market was not conducive.

Explaining why government took the decision not to issue the bond, Terkper said:

"One of the reasons is that Ghana has already refinanced approximately US$216 million of the original value of US$750 million from the proceeds of the 2013 bond issue.

"We have also utilised funds from the Sinking Fund established in 2014 to buy back or redeem US$33 million of the outstanding bonds in 2016, hence the balance of the bond is US$500 million, he explained.

Terkper further noted that unfavourable rates being offered reflected conditions beyond Ghana's economic performance.

READ MORE: Ghana halts Eurobond sale as investors fret over gov't fiscal targets

The Minority spokesperson on Finance in Parliament, Dr Anthony Akoto Osei, has said the investors ditching the bond shows a lack of confidence in the Ghanaian economy.

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

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