The Chief Executive Officer of Dalex Finance Ken Thompson says the almost 11 percent interest Ghana will be paying on its recent 1 billion-dollar Eurobond is disappointing.
The 15-year bond according to government will among other things be used to finance maturing debts.
Government went through a lot of difficulty to get parliamentary approval for this bond-issue but easily managed to get the World Bank to guarantee part of it.
But in an Interview with Joy Business Mr Thompson says although the bond raised is good, the rate given to Ghana smacks of a lack of trust in its economy.
According to him, if Ghana was not able to get any money from the market “we would be in a huge hole so I think it’s fantastic for everybody because where else would we have gotten the money from”, he queried.
However, the 10.75 percent interest is “rather disappointing because Ghana is under an IMF programme and the World Bank guaranteed the loan up to 400 million dollars so you would expect that the market would feed these variables into the price”, he said.
Mr Thompson believes that the development is simply a reflection of the market’s perception of Ghana, which he says is one thing the country has never faced up to.
Ghana, he stressed, “is broke and the market thinks Ghana will not be able to implement the programme it has signed up to, under the IMF programme and should take that as a signal.”
“The earlier we started facing up to our debt as well as the economic issues and deal with them squarely, the better but this is a signal, and in the wrong direction” he added.
Source: myjoyonline.com
