Ghana’s Finance Minister, Ken Ofori-Atta has revealed plans of issuing green and social bonds for up to $2 billion by November and this will make Ghana the first African country to sell debt in other to fund development programs.
The West African economy planning to borrow $ billion on the international market will be able to use the proceeds from the funds that are sustainable in other to refinance debts that were used for both social and environmental projects and also to pay for educational or health likewise said by Ghana finance minister Ken Ofori-Atta in an interview that took place in their capital Accra.
The bonds expectation is that it will be issued out during the fall which the maximum can be $2billion of which was approved in the budget after the country already sold $3.03 billion in March out of $5 billion for which there is an approval on the budget.
A total of $3.5 billion will be used to refinance a debt that was already raised. And the new debt will now be $1.5 billion the Finance Minister revealed.
They expected the bonds will be given in the fall and Ghana will be leading social bonds in Africa, taking advantage of the instrument that has boomed since the coronavirus pandemic. Even at that, only a few sovereigns have sold them so far which includes Chile and Ecuador.
The country will forge ahead with an initiative of free secondary school which started in 2017 among other programs, even though the lowest recorded economic rate was in 2020 for 37 years.
Ofori-Atta said that bonds that are sustainable are not cheap and there is no discount, he said he will have sought ways to negotiate for the best terms. The leader in gold production in Africa is currently targeting a budget gap of 9.5% of gross domestic product this year from a shortfall of 11% in 2020 and expects to expand its output to 5% from 0.4% last year.
They keep working to improve their collection of tax revenue which has been known to be low historically compared to their peers in the region. This was after President Nana Akufo-Addo stated that that the base of their tax will grow more than fivefold to 15.5% million after the government must have implemented the 1 April system where all the national identification numbers will serve as tax numbers.
Ofori-Atta
“we want to really double our tax revenue to about 28% of GDP with the use of digitalization so that we can be able to create a more vibrant economy come next three years” ofori-Atta said.