Friday, 15 October 2021

Govt borrows GH¢21b from money market

 


By Elorm Desewu

The government, through the Bank of Ghana, (BoG) plans to raise GH¢21 billion from the money market by issuing Treasury Bills, Notes and Bonds.

Of the GH¢21.170.00 billion, GH¢20.129 billion would be used to rollover maturities. The remaining GH¢1,040.70 million is fresh issuance to meet the government’s financing requirements.


The stock of public debt has increased to 76.4 percent of GDP (GH¢335.9 billion) at the end of July 2021, compared with 76.0 percent of GDP (GH¢291.6 billion) at the end of December 2020. Of the total debt stock, domestic debt was GH¢173.4 billion (39.5 percent of GDP) while the external debt was GH¢162.5 billion (37.0 percent of GDP).


Per this calendar, the 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 10-year will be issued through the book-building method; and consistent with the MTDS, Government may announce tap-ins/reopening of other existing instruments depending on market conditions.

 

The calendar is developed based on the revised net domestic financing provided in the 2021 mid-year budget, the 2021 domestic maturities, the 2021 Annual Borrowing & Recovery Plan and the 2021-2024 Medium-Term Debt Management Strategy.

It indicates the securities that are intended to be issued in respect of the government’s public sector borrowing requirements for the period October to December 2021.

The calendar 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.

 

 

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