Ghana has recently needed the credit guarantee for its new loan engagements in order to restore confidence in the country’s credit worthiness in recent times.
Ghana on Wednesday, August 5, 2015, signed a partial risk guarantee of $620 million. This is to guarantee Ghana’s upcoming acquisition of $1.8 billion cocoa syndicated loan and an upcoming $1.5 billion Eurobond.
Ghana has recently needed the credit guarantee for its new loan engagements in order to restore confidence in the country’s credit worthiness in recent times. The country’s debt situation is increasingly becoming complicated with debt to GDP ratio hitting 67% of GDP at GHC 90 billion.
Ratings agency Moody’s downgraded Ghana’s credit worthiness from B1 in 2014 to B2 in 2015. But the new Ghana country director of the IMF believes “ this guarantee will help restore Ghana’s credit worthiness, which will help the country get lower interests for its next Euro-bond.”
The country director also told the media at the partial risk guarantee signing ceremony, “ The IMF is supporting Ghana because it deserves it, and we believe in the country’s economy. Government has also shown a commitment to doing what is necessary to turn the countries fiscal issues around”
Ghana got 8 per cent and 8.5 per cent for its Euro-bond in 2013, 2014 and 2015 respectively.