In the last quarter of this year, the government will borrow ~¢22.1 billion.
In December 2020 alone, ¢11.3 billion of both short and long-term financial instruments will be raised.
According to the issuance calendar of the Bank of Ghana, approximately $19.6 billion will be used to settle the principal and interest of existing loans [roll-over maturities].
However, fresh issuance of around ¢2.5 billion would be used to fund government projects.
In September, the government expected to borrow around ¢22.7 billion between September and November 2020. Out of that, fresh issuance was projected to be around ¢3.05 billion.
Of the total amount to be collected in the fourth quarter of 2020, the calendar reveals that ¢9.7 billion, which is the largest amount, will be released by a 91-day Treasury bill.
The lowest amount to be raised, which would be accomplished by a 20-year bond, is around ¢287 million. Originally, the 20-year bond was expected to be released in November but, due to current market conditions, it had to be postponed to December.
The 91-day and 182-day Treasury bills will be issued every week, according to the Finance Ministry, while the one-year Treasury note will float every fortnight.
However, this will be achieved by the primary auction, with the transaction date plus one working day being the settlement.
However, two-year to seven-year securities will be issued via the book-building process, where a pricing guideline will be set.
The additional ¢2.5 billion as of July 2020 will add up to the overall government debt of ¢263 billion.
The World Bank warns the nation against increasing debt,
The World Bank forecast a major increase in Ghana ‘s overall public debt for this year in its latest October 2020 Africa Pulse Survey.
According to the Bretton Wood institution, this is attributed to the widening fiscal deficit brought about by Covid-19 as a result of lower revenue and high expenditure.
The debt of the country reached ¢263 billion, around 68.3 percent of July 2020’s Gross Domestic Product.
According to the World Bank ‘s report, Ghana still remains a country with a high risk of debt distress.
However, neighboring Ivory Coast is listed as having moderate debt levels and in the category of moderate risk.
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