$3bn Eurobond success signals investor confidence in Ghana – Ofori-Atta

The success of the recent $3 billion Eurobond issue confirms foreign investors’ confidence in the economy, Finance Minister, Ken Ofori-Atta told Parliament recently.

He said investors are more willing to put their money into the economy under the current administration than the previous government.

He compared the recent $3 billion Eurobond issue with the previous 2016 issue for $750 million and argued that the current administration got a better coupon rate.

The Minister made the comments when he addressed Parliament on the successful completion of the IMF programme and other economic issues.

He told Legislators that the success of the $3 billion Eurobond issue was significant because it has been recorded despite Ghana’s exit from the International Monetary Fund (IMF) programme.

“The last Eurobond of the previous government of 750 million dollars was issued in 2016, the order book was four billion dollars over five times larger. But this came at a high cost of 9.25 per cent for six years,” the Minister said.

The Minister said with about 20 per cent oversubscription in the latest Eurobond, the international investment community has confirmed that they feel safe to invest in Ghana.

Touching on the cedi depreciation, Mr Ofori-Atta said even though the cedi has suffered some depreciation against the dollar its quick recovery shows that the fall was not due to macroeconomic fundamentals.

He further stated, “It is clearer from the data that the depreciation of the cedi was not due to weak economic fundamentals but rather a combination of structural rigidities and apparent speculative behaviour of portfolio investors” .

“We have done a lot of work to ensure that the economic fundamentals are robust and able to support economic growth and transformation,” he said.

Mr Ofori-Atta also added that current progress on the economy, sustained GDP growth and economic transformation would eventually ensure that the currency was stable over the medium term.

He said the Bank of Ghana would remain vigilant in the short term to build adequate revere buffers and promote market discipline in the foreign exchange market over the medium term.

“The government will ensure that we have a transformed economy that will strengthen our trade, current and capital accounts”.

Source: Joyonline