Gov't to issue GHC500m domestic bond in August

Local businesses can finally have somewhat easy access to credit on the local money market as government decides to issue a new 5-year bond to raise 500 million cedis ($127 million) this month as part of efforts to restructure its growing debt.

In a media briefing Tuesday, Finance Minister Seth Terkper said government has decided to minimize its short- term debt on the local market in order to create room for local businesses.

Many have, in the past 3 years, criticized government’s borrowing habits on the local money market with its high treasury bill rates. This according to players in the business sub-sector was depriving local businesses of access to credit for their businesses.

The Finance minister emphasized that it is government’s hope to reduce its short term borrowing on the local market.

The government has appointed dealers from Barclays Bank, Stanbic Bank and Strategic Africa Securities to act as book runners to rally investors for the bond which will be used to support government’s finances.

Government exceeded its borrowing target for the first six months of this year by more than GH¢763million, further deepening concerns about the country’s debt position.

Figures available to pulse.com.gh from the central bank indicate that government borrowed a little above GH¢26.18billion in the first half of this year, which is more than the GH¢25.42billion it had planned to borrow from the domestic securities market.