Government’s decision to borrow 1.5 billion cedis from the domestic market contradicts its new debt management strategy as published by the finance ministry.
This is according to the head of the finance department of the University of Ghana Business School Dr. Godfred Bokpin. The Bank of Ghana (BoG) will on October 22 issue the 1.5 billion cedi 3 year fixed rate bond. This comes after government issued a 1 billion dollar Eurobond at a coupon rate of 10.75 percent earlier.
In an interview with Citi Business News, Dr.Bokpin said government’s move is negatively impacting the private sector. ”I’m not too sure why this announcement of raising 1.5 billion cedis from the market, already credit is squeezed. Already we have crowded out the private sector “, he stated.
The debt management division of ministry of finance in its new strategy plans to extend the country’s debt maturity profile and help free up credit for the private sector. ” So while the debt management strategy is trying to free up capital for the private sector , the monetary policy is equally mopping up excess liquidity from the market , so it doesn’t leave the private sector with any hope necessarily”, Dr.Bokpin added.
By: Rabiu Alhassan
