Ghana Plans to Support Century Bond With Rising Oil Revenue
Ghana Plans to Support Century Bond With Rising Oil Revenue
(Bloomberg) -- Ghanaian Finance Minister Ken Ofori-Atta said the country will support its proposed issuance of as much as $50 billion of century bonds with rising oil revenue.
The West African nation will issue $3 billion to $7 billion of the securities every year that will be sustained through income from its stakes in offshore fields, which is forecast to double to $1 billion over the next five years, Ofori-Atta told a conference Monday in the capital, Accra. Plans to improve tax collection and better governance of state expenditure are additional measures that will enable Ghana to pay for the debt, he said.
“With that sort of support from oil and then measures being put in place to enhance tax revenue, we think our budget will be in a position to provide the needed comfort to investors,” said Ofori-Atta.
Last month, Ofori-Atta said the country is preparing to sell $5 billion to $10 billion of century bonds before the end of the year, at a time when rising U.S. rates are making investors wary of emerging-market debt. A sale will help Ghana to pay off existing debt, build factories and overcome an estimated shortfall of $7 billion in annual infrastructure spending, he said.
An issuance by year-end will be Ghana’s second sale of Eurobonds in 2018, after it raised $2 billion in 10- and 30-year securities in May. Earlier this year, the country weighed selling so-called Panda bonds in mainland China and Samurai notes in Japan before abandoning the idea.
To contact the reporter on this story: Moses Mozart Dzawu in Accra at mdzawu@bloomberg.net
To contact the editors responsible for this story: Andre Janse van Vuuren at ajansevanvuu@bloomberg.net, Pauline Bax
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