As government looks for options to raise funds to retire the 2017 Eurobond, the Chief Executive Officer of\u00a0 Dalex Finance, Ken Thompson has urged the Finance Minister to increase income and cut down on expenditure.<\/p>\n
According to him, the Finance Minster can also try to renegotiate the terms of the 2017 Eurobond to provide government some space to pay back in a flexible condition.<\/p>\n
In 2007, government issued\u00a0 \u00a0US$750 million Eurobond to pay back in ten years.<\/p>\n
The Finance Ministry announced last week that it has put on hold the issuance of a Eurobond intended to retire the 2017 bond due to unfavorable market conditions.<\/p>\n
But looking at the maturing date for the 2017 Eurobond, Mr. Ken Thompson maintained that government needs to adjust its fiscal stands since the options available are limited.<\/p>\n
\u201cThe Finance Minster can do two things. He can increase income, cut expenditure or he can do both or find other sources of income,\u201d he suggested.<\/p>\n
Mr. Thompson stated that it is imperative for government to begin a sustainable way of managing the 2017 Eurobond since it must be retired.<\/p>\n
\u201cIt is what it is. We must pay for it and so the Finance Minster must begin to move in that direction. Like I said, we can cut down on expenditure and increase income in that direction\u201d<\/p>\n
He was of the view that the Finance Minster can also engage the investors of the 2017 Eurobond to review some of the terms to make the payment flexible.<\/p>\n
\u201cI don\u2019t \u00a0know if it will be possible but I think it also an option. The Finance Minister can renegotiate, and ask for some time. The options are very limited but we must pay,\u201d he said.<\/p>\n
Reacting to some suggestions that the market may never get better this year for government to issue the Eurobond, Mr. Thompson stated that whether government issues the bond or not it has to make do with \u00a0its promise of paying back.<\/p>\n
\u201cI don\u2019t think the issue is about abandoning the issuance of the Eurobond. Because we have to pay for the 2017 Eurobond as it matures. That is the issue,\u201d he said.<\/p>\n
He admitted that with the high coupon rate demanded by investors on the Eurobond, it was a reflection of lack of confidence in the Ghanaian economy.<\/p>\n
Government suspends \u00a05th Eurobond\u00a0<\/strong><\/p>\n The Ministry of Finance announced on August 4, 2016 that government has put on hold plans to issue its fifth Eurobond which was scheduled to take place next week.<\/p>\n Government was seeking to raise 700 million dollars, majority of which was to be used to retire Ghana\u2019s first Eurobond which matures next year [2017].<\/p>\n Finance Minister, Seth Terkper \u00a0led a team of government officials as well as financial advisers to convince investors in London and New York to patronize Ghana\u2019s next Eurobond.<\/p>\n But a statement from the finance ministry on Thursday said government has \u00a0put the issue on hold till market conditions are right.<\/p>\n \u201cThe Government will continue to build on this dialog with international investors while monitoring the markets and the IMF Board process with respect to the Third Review of the Program and will issue new notes at the optimal time and the right conditions\u201d.<\/p>\n Instead government \u2018will proceed with a capped cash tender offer, up to 100 million dollars of the Ghana 2017 bonds issued in 2007, in line with Ghana\u2019s buyback program\u2019.<\/p>\n Despite receiving positive feedback from investors on the ongoing fiscal consolidation process Ghana was unable to convince investors to dish out cash at a rate lower than 10.75 percent obtained in the last Eurobond.<\/p>\n \u2013<\/p>\n By: Lawrence Segbefia\/citibusinessnews.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":" As government looks for options to raise funds to retire the 2017 Eurobond, the Chief Executive Officer of\u00a0 Dalex Finance, Ken Thompson has urged the Finance Minister to increase income and cut down on expenditure. According to him, the Finance Minster can also try to renegotiate the terms of the 2017 Eurobond to provide government […]<\/p>\n","protected":false},"author":14,"featured_media":237340,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[121,32,171],"tags":[],"yoast_head":"\n