Ghana urged to use $2.2b bond sale to diversify economy

Ghana has been urged to invest the $2.2 billion bond the country recently issued into diversifying the economy. The bond sale, has meanwhile been questioned by some Ghanaians.

A UK think tank, the Overseas Development Institute (ODI) has urged the country to invest in greater economic diversity to make the most of the recent $2.2 billion bond sale, which is the biggest single-day debt issued by an African country.

Meanwhile, Ghana alone holds 10 per cent of the $35 billion Eurobonds issued by African countries as at 2016.

With national debt already above 70 per cent of GDP amid low oil prices and poor financial management, with sizeable consequences for the accounts, and the identification of another $1.6 billion in undisclosed debt discovered by the new administration, this  massive debt sale at substantial interest rates of almost 20 per cent, should be worthwhile, the ODI argues, and suggested that Ghana should use the proceeds to reverse its economic fortunes.

“Stabilisation in oil and commodity prices means that Ghana’s growth prospects are looking up,” senior research fellow Phyllis Papadavid was quoted as saying in a briefing note.

“This sale could be a turning point for Ghana if the proceeds are used to support the productive economy and diversification away from its resource sector,” she adds.

By Emmanuel K. Dogbevi