An Assessment of the Proposed US$50 Billion Century Bond for Ghana

Fiscal Alert 14: An Assessment of the Proposed US$50 Billion Century Bond for Ghana

The Minister of Finance has disclosed that the 2019 Budget will announce the issuing of a US$50 billion century bond that will provide resources to help address major challenges confronting the country, including the cedi depreciation, infrastructural deficit, and low industrial development. A successful century bond will make everybody comfortable about the future of the country’s needs for both infrastructure and foreign exchange so that we have a lot more stability. According to the Minister, the bond will be raised in bits through a shelf offering, which will allow issuers to register a security without selling the entire issue at once.

The Minister’s disclosure followed an announcement made by the President last month in China. With the country exiting the IMF program by the end of the year, the President stressed that Ghana is determined never to return to the Fund-support program. In order to do so, the government is looking seriously at how it can secure sources of long-term finance that will allow it to deal with the country’s infrastructure development and also realize the vision of a “Ghana beyond Aid”. To this end, the Ministry of Finance is considering floating an ultra-long-term-bond

This paper reviews the government’s plan to issue a US$50 billion century bond to finance infrastructure and other development projects and offer some suggestions for that initiative.

Read full paper here