A financial analyst has endorsed Ghana’s move to seek a bailout from the International Monetary Fund (IMF), alongside the issuing of the Euro bond.
He stated that since the IMF bailout may take while, the Euro Bond will help shore up the economy.
The $1 billion Euro bond, which is to be used to fund government’s capital expenditure in the 2014 budget, will also be used as counterpart funding for pipeline projects and the refinancing of domestic and external debt.
Speaking to Citi Business News, Dr. Godfred Alofa Bokpin, who is also a senior lecturer at the at the University of Ghana said the IMF bailout and the 1 billion Eurobond would boost investor confidence in the economy.
“Going to the IMF, vis-à-vis issuing the third Eurobond, might be good for us because when we sign off on the IMF bailout, we will be under some kind of supervision which will make investors have confidence to purchase our bond,” he explained.
He added that Eurobond will help Ghana build its international reserves and provide a backup for the cedi.
“It will also help build our international reserves. Because the inflows of IMF will not come soon, the Eurobond with the cocoa syndicated loan, we might be able to stabilize the cedi preventing it from further depreciation.”
By: Norvan Acquah-Hayford/citifmonline.com/Ghana