Ghana raises $2b Eurobond at lowest interest rate

BY: Graphic.com.gh
Minister of Finance, Mr Ken Ofori Atta
Minister of Finance, Mr Ken Ofori Atta

The government last Thursday successfully managed to raise $2 billion from the international capital market through the issuance of two bonds.

While the government raised the highest amount ever by the country on the market, it also managed to attract the lowest interest with a historic 30-year repayment period for one of them.

The bonds were in two categories: $1 billion was raised through a 10-year bond at an interest rate of 7.627 per cent, and again $1 billion through the maiden 30-year bond raised at an interest of 8.627 per cent.

Both were oversubscribed to $5.5 billion which is an indication that the international investors are showing a lot more confidence in the Ghanaian economy, and are also responding more favourably.

Uses for the proceeds

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A statement issued by the Finance Ministry on May 11, 2018 explained that US$750 million of the amount raised represented new debt, while a portion of the remainder would be used to swap for more expensive existing Eurobonds, as well as other liability management operations.

This means that only $750 million will add up to the country’s existing public debt which was GH¢142.5 billion as of the end of 2017.

The government plans to use the $750 million to develop infrastructure in the rail, fisheries and aquatic sectors; build roads, silos, rehabilitate warehouses and invest in education.

It also explained that despite the size, the US$1.25 billion which would be used for liability management would not add up to the debt stock of the country as it is debt neutral.

This development throws a positive light on the economy in the sense that it has a lot of implications by way of helping to shore up the country’s foreign reserves.

The shoring up of the reserves will directly impact the cedi by strengthening it against the major foreign currencies, especially the US dollar, thereby helping to bring inflation further down.

The last 5-year bond issued by the erstwhile National Democratic Congress (NDC) administration cost Ghana a coupon rate of 9.25 per cent.


The recent issuance has been described as laudable by many, especially for an emerging market such as Ghana’s.

Some of the notable characteristics of the issuance include a sub-Saharan country with a B Stable rating, pricing a sovereign bond at this low cost for the first time, indicating a strong investor confidence.

Also for the first time, Ghana has extended its international capital market funding to 30 years.