No Rush To Go And Borrow From International Capital Market – Ofori-Atta
Finance Minister Ken Ofori-Atta has debunked reports of returning to the international capital market to borrow soon after securing an International Monitory Fund (IMF) bailout.
“There is no rush in going back to the international capital market. Our expectation is that in managing our expenditure and increasing our revenue, we will have the resources to do it. Working towards the capital market is important because we want to get our ratings up and make the country more attractive for investors, especially Foreign direct investments (FDIs). So no one is rushing to the capital market at this juncture,” he said.
Mr Ofori-Atta’s comments were contained in a virtual press conference held on Thursday, [May 18], to provide journalists with insights into the outcomes of the Executive Board meeting concerning Ghana’s request for an Extended Credit Facility (ECF) arrangement.
The market that provides the platform for residents of different countries to trade assets is not a single market but a group of closely interconnected markets in which asset exchanges with some international dimensions occur.
In April 2021, Mr Ofori-Atta disclosed that Ghana may have to wait before returning to the international capital market.
According to him, Ghana’s temporary obstruction from the international capital market poses an opportunity for the country to pursue self-sufficiency.
In an interview at the IMF spring meeting in Washington DC in 2021, the minister said, “In terms of returning to the international capital market, I suspect it will take some two-three years or so, if not more, for us to get back to it. I think in the interim, we should be able to generate local resources to do that”.
Ghana’s debt stock increased by GH¢108.3 billion between September and November 2021, according to the Bank of Ghana’s January 2023 Summary of Economic and Financial Data.
The data also put Ghana’s total public debt stock, as of November 2022, at GH¢ 575.7 billion.
In terms of domestic debt, it stood at GH¢194.7 billion at the end of December 2022, representing 31.6% of GDP.
Debt owed the international capital market stood at $13.13 billion, constituting the largest share of 46.79% of the total external debt stock at the end of the second quarter of this year, data from the Bank of Ghana (BoG) has revealed.
The central bank said this was mainly due to the $3 billion Eurobond floated in April 2021.
Also, commercial debts at the end of June 2021 were estimated at $2.72 billion, which accounted for 9.7% of the total external debt stock.
The external debt stock is equivalent to 37.0% of GDP.
Ghana suspended Eurobonds and other external forms of borrowing that had resulted in huge debts to the tune of $28 billion as of July 2021.
The International Monetary Fund (IMF) approved a $3 billion bailout to support Ghana’s economy on May 17, 2023.
IMF Managing Director Kristalina Ivanova Georgieva-Kinova chaired the Board meeting on Ghana’s programme.