Monday, 15 January 2018

Businesses to wrestle with gov’t for loans

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Adnan Adams Mohammed

The Ghanaian business public are to fray with the government on the scarce loanable funds from the financial market.

This compounds the challenges of the business public in getting access to funding for their business expansion and other trading purposes.

This arises from the government’s readiness to raise GH¢11,133.91 billion in the first quarter of 2018 through debt securities from the financial market. GH¢8,961.30 billion of the amount will be used to roll over maturities.

The remaining GH¢2,164.61 billion will be used to meet Government’s financing requirements for the period.

This puts pressure on the available funds on the financial market and likely that, the government attracts almost all the available funds due to the interest returns the government offer on its debt instruments.

The businesses will therefore have to struggle more by paying high interest returns on loans from the market in order to compete with the government.

A statement issued by the Debt Management Office of the Ministry of Finance stated that about GH¢5 billion in 91-day treasury bills will be issued in January, February and March while a total of GH¢1.8 billion in 182-day treasury bills will also be issued through the period as well.

Meanwhile, 1 year and 2-year notes amounting to about GH¢2.5 billion will also be auctioned.

A three year GH¢600 million and 5-year GH¢1 billion bond will be auctioned in March and February respectively.

This year’s figure is much lower than the figure raised by Government in the same period last year.

In the first quarter of 2017, government announced it will raise GH¢17,400.00 million through bonds and treasury bills and other government securities.

The cash was to be used to rollover forecast maturities, meet Government’s financing requirements and build buffers for liability management.

Economists assert the reduction in this year’s figure reinforces Government’s move to reduce the country’s debt stock.