By Elorm Desewu
The government plans to borrow a gross amount of GH¢24.696 billion for the second quarter of 2022, through the issuance of Treasury Bills, Notes and Bonds from the domestic money market.
Of the GH¢24.696 billion, GHȼ20.102 billion would be used to rollover maturities, while the remaining GH¢4.593 billion which is fresh issuance, would be used to meet Government’s financing requirements.
According to the Bank of Ghana, the debt calendar also takes into consideration the government’s liability management programme, market developments both domestic and international and the Treasury & Debt Management objective of lengthening the maturity profile of the public debt.
Per the calendar, Government aims to build benchmark bonds through the issuance of instruments as follows: the 91-day and 182-day will be issued weekly; the 364-day bill will be issued bi-weekly also through the primary auction with settlement being the transaction date plus one working day; securities of 2-year up to 6-year will be issued through the book-building method by the Bond Market Specialists (BMS); and consistent with the MTDS, Government may announce tap-ins/reopening of other existing instruments depending on market conditions.
Ghana’s total public debt has continued to climb up, recording GHC351.8 billion or US$58.6 billion representing 80.1 percent of Gross Domestic Product, (GDP), at the end of December 2021 compare with GHC341.8 billion recorded at the end of September, 2021.
The external component of the debt portfolio was US$28.3 billion or GHC170 billion representing 38.7 percent of GDP.
Of the total debt stock, the domestic debt was GHC181.8billion representing 41.4 percent of GDP.
The government’s Medium-Term Debt Management Strategy proposes appropriate financing for the period 2022 – 2025 which sets out to achieve the following objectives: meet Government’s funding needs on a timely basis and at a relatively lower cost subject to prudent levels of risk; promote the development of efficient primary and secondary markets; and pursue any other action considered to impact positively on the public debt stock.
The financing for 2022 seeks to further develop the domestic market by proposing new instruments to diversify the debt portfolio and increase the debt financing capacity of the domestic market.