Ghana Returns to Bond Market Amid GHS150 Billion Debt Repayment Schedule

Ghana plans to issue new local bonds. This comes after the country's debt restructuring. Analysts say this will help the local bond market.

The market needs more cash flow. This new bond program will help rebuild trust. It will also make the domestic debt market stronger.

The government will offer details on March 26. This includes how the bonds will be set up, issued, and traded.

Economists have shared their views. Nelson Cudjoe Kuagbedzi and Professor Peter Quartey want the government to be clear. They say the process must be open.

Dr. Richmond Akwasi Atuahene calls this move a big risk. He said it could lead to economic recovery or more debt problems.

He noted some good signs. Inflation has dropped to 3.3%. Treasury bill rates are around 10.7%. The government has paid all restructured bond coupons, including GHS11.3 billion (US$909 million) in February. This shows growing trust.

But big challenges remain. Ghana has GHS150.3 billion in debt due in the next four years. This is about 11.6% of the national output. Peaks include GHS57.6 billion in 2027 and GHS52.5 billion in 2028. There is also about GHS108 billion (US$8.7 billion) in foreign debt payments in the same period.

Mr. Kuagbedzi believes investors will return. He expects pension funds and long-term investors to buy the new bonds. He expects new bond prices to be around 10%. This is similar to current restructured bond rates and above the 3.3% inflation.

Professor Quartey stressed that bonds are important for big projects. He said investors need to know how funds will be used. Also, how repayment will be guaranteed. He noted that about 40% of public projects are not efficient.

He added that interest rates must be fair. They need to attract buyers but not make the debt worse.