-As Rating Agencies Warn That Ghana has Become Highly Indebted Country.
According to the Reuters news agency, Ghana’s Finance Minister, Ken Ofori-Atta is setting up to issue a GH¢22.3 billion cedis (US$3.9 billion) in bonds in the first quarter according to the finance ministry’s issuance calendar seen on Monday.
More than 90% of the debt (some 19.7 billion) will be used to pay off previous debt, while only GHC 2.6 billion is fresh issuance to meet the government’s financing requirements.
This insatiable appetite for debt is coming in the heels of several warnings issued to the Akufo Addo administration that Ghana has been run aground into debt unsustainability levels.
Already, rating agency, Moody’s has explicitly warned that Ghana’s economy could come under some pressure from the rising debt which is projected to hit about 80% of Gross Domestic Product by the end of this year.
In Moody’s 2021 Sub-Saharan African (SSA) Outlook report, it stated: “ In SSA, higher external vulnerability indicators – which are a measure of short-term debt and upcoming external debt maturities against international reserves – will be more challenging for sovereigns outside of monetary unions. Zambia and Ghana will see the greatest EVI pressures, with 2021 levels forecast to be 509% in Zambia and 143% in Ghana”.
Critics have been particularly contentious about the Finance Minister’s constant resort to debt, but it has been revealed that most of these bond issues are underwritten by his private investment brokerage firm, Databank Financial Services, which takes home juicy commissions every time it underwrites such transactions.