The Ministry of Finance has refuted claims by international media firm – Bloomberg that Ghana’s debut 20-year bond was under-subscribed.
In a statement to debunk the claim, the Ministry of Finance said the issuance of the longest-tenor domestic bond was to raise as much as GH¢450 million.
It explained that the rationale behind the issuance was to extend the tenor, yield curve, and establish a benchmark.
The Ministry in the statement indicated that:
“We are aware that given the current market conditions and the limited appetite for longer-dated bonds, the size of the debut issue was unlikely to be of a benchmark size, and that was the reason it was structured as a shelf offering so additional issuances could be done overtime to reach the target GHc450 million benchmark level. As such, contrary to the articles published by Bloomberg, this was not a failed or under-subscribed offering but a fairly priced offering that has established another data point along our yield curve.”
It was however unhappy with Bloomberg’s publication which supposedly portrayed the 20-year bond as a failed one arguing that the report “does not reflect well of an esteemed Financial Media House such a Bloomberg.”
The Ministry in the statement also raised concerns with other publications by Bloomberg on Ghana’s economy “which seem to always have a negative and sensational slant.”
“The Ministry has followed with regrets recent articles published by a particular Bloomberg reporter on Ghana’s economic and financial performance, which seem to always have a negative and sensational slant which does not seem representative of a balanced view. This does not reflect well of an esteemed Financial Media House such a Bloomberg. This raises serious concerns for the Ministry and we are clearly contradictory with the former clearly depicting the author’s personal opinion whereas the latter that the IMF. How can the worst country performer with regards to currency, be touted for being a star with the strongest global economic growth in 2019 less than two weeks later, by the same Bloomberg”, government noted.
Investor confidence assured
The Ministry in the statement insisted that strides have been made given the successes chalked in the 2019 Eurobond issuance and further assured investors that the debt mechanism put in place is capable to shore up its debt sustainability for a robust macroeconomic environment.
“Since our success at this year’s Eurobond issuance, the domestic market has shown significant signs of growth indicating that the domestic market is getting deeper and sophisticated. This is consistent with our drive to increase resident participation in longer-dated instruments to reduce foreign exchange risk. We want to assure all investors and the public that our debt strategy is well anchored on debt sustainability, improved real rates, and a stable macroeconomic environment.”