As the Covid-19 pandemic continues to ravage global economies, the Government of Ghana is said to be going to the domestic financial market to borrow GH¢17.9 billion in the second quarter of this year, that is between April 2020 – June 2020). This would take government borrowing a notch higher.
GH¢13.6 billion, out of the money, will be used to settle maturing commitments while the remaining GH¢4.27 billion will be used to take care of the government’s financing requirements.
Government’s issuance calendar
According to government’s Issuance Calendar for the second quarter of this year, GH¢8.2 billion will be the highest to be raised through the issuance of a 91-day Treasury bill.
This will be followed by GH¢2.7 billion which will be raised from the sale of a 1-year note, and a GH¢1.8 billion from a 3-year bond.
The 3-year bond of GH¢800 million and GH¢1 billion will be issued in April and June 2020 respectively.
Also, GH¢1.62 billion and GH¢1 billion will be raised from the issuance of a 182-day bill and a 5-year bond.
Moreover, GH¢800 million each will be mobilised from the issuance of a 7-year and 10-year bond respectively while an additional GH¢700 million will also be raised from the sale of a 2-year bond.
However, for the second time, the government of Ghana will issue a 20-year bond to raise GH¢700 million.
Net Domestic Financing
According to the Finance Ministry, the calendar is developed based on the Net Domestic Financing in the 2020 Budget, the domestic maturities and the Medium-Term Debt Management Strategy (MTDS) for 2020- 2023.
The Calendar also shows the securities that are intended to be issued in respect of government’s Public Sector Borrowing Requirements for the period April to June, 2020.
Ghana ended 2019 with a total public debt stock of GH¢218 billion, according to Bank of Ghana’s December summary of financial and economic data. This was about 63% of Gross Domestic Product.
Out of this, external debt constituted GH¢112.5 (US$20.3 billion). This represented 32.5% of GDP.
GH¢105.5 was borrowed from the domestic market, representing 30.5% of GDP