Ghana's $3 billion eurobond foray comes at a tricky time

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Ghana is battling with the world’s weakest currency this year and concerns about how it will manage its finances once a four-year bailout with the IMF ends next month.

Wednesday 13, March 2019

(Bloomberg) --Ghanaian officials are preparing to meet fixed-income investors in the US and London this week as they look to issue a $3 billion Eurobond, and it is expected to be a tough sales pitch.

An offering from the West African nation’s government may well be imminent, but only if officials are satisfied with the price that traders demand.

Finance Minister Ken Ofori-Atta is also negotiating a $750 million bridge loan from Standard Bank Group and Standard Chartered to tide the government over in what he says has been a quite challenging first quarter.

Gregory Smith, a strategist at Renaissance Capital in London, said, “Confidence in Ghana has ebbed a little in 2019 relative to other Africa sovereigns.”

“Investors have concerns that Ghana’s recent good record with fiscal discipline might unwind over the next year, especially as the IMF programme ends and the 2020 elections are on the horizon,” added Smith.

Ghana does have strong economic growth in its favour – GDP will expand 6.6 per cent this year, according to the average forecast -- but revenue collection is low compared to peers.

President Nana Akufo-Addo said last month he was extremely upset and anxious about the currency’s slide.

TAGS : Euro bonds, bridge loan, Standard Bank, Standard Chartered

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