The Minister of Finance is seeking parliament’s approval to continue to raise funds from the international capital market to fund the 2021 budget and liability management.

According to him, the funds will comprise the issuance of sovereign bonds of $3 billion with the option to increase it to U$5 billion should market conditions prove favourable.

Delivering the 2021 first-quarter budget statement in Parliament on Wednesday, October 28, 2020, Mr. Ofori-Atta said out of the amount to be raised, US$1.5 billion will be used to support the 2021 budget and US$3.5 billion for liability management.

“Mr. Speaker, to support the 2021 budget and liability management, we plan to source funding from the international capital market. This will comprise the issuance of sovereign bonds of US$3 billion with the option to increase it to US$5 billion should market conditions prove favourable. Out of the amount to be raised, US$1.5 billion will be used to support the 2021 budget and US$3.5 billion for liability management,” he said.

The planned 2021 bond issuance comes after the government went to the Eurobond market in November 2019 to borrow US$3billion to help the government bridge the deficit between its revenue and expenditure in 2020.

Ghana first went into the international capital market in 2007 to raise funds to support the budget.

Ghana’s maiden Eurobond, a US$750 million bond, was issued at a coupon rate of 8.5 percent.

Four other bonds were issued between 2013-2016, all receiving mixed reactions from the market.

Government requests for for GHS27. 4 billion

Ken Ofori-Atta used the opportunity to request for GHS27. 4 billion for the running of the country for the first three months of 2021.

He asked Parliament to approve “by resolution, the withdrawal of the sum of twenty-seven billion, four hundred and thirty-four million, one hundred and eighty thousand, five hundred and twenty Ghana cedis (GHS27,434,180,520.00) from the Consolidated Fund.”

“This is for the purpose of meeting expenditure necessary to carry on the services of the Government in respect of the period expiring three months from the beginning of the financial year or on the coming into operation of the Appropriation Act in respect of the 2021 financial year.”

Source: Citibusinessnews.com