An economist, Dr John Gatsi, says the successes chalked by government in the issuance of Ghana’s first domestic dollar-denominated bond was due to what he termed as better incentives provided to investors.
According to him, “the fact that the bond was denominated in the dollar was a very attractive strategy for investor.”
Government last week raised a total of 94.6 million dollars through a total of 26 bids from local investors at a rate of six per cent with maturity term of two years.
Although government had targeted 50 million dollars, it managed to raised 99.6 million at the end of the bid but accepted 94.6 million dollars.
This Dr Gatsi says observed has come about as a result of the high stakes in the bonds, noting generally, if you look at the economy, debt instruments look attractive to investors.
“The way government was able to market the bond, amidst the various economic challenges was another incentive for the high purchase,” he said.
Dr Gatsi who is a senior lecturer at the University of Cape Coast expressed optimism that this pattern of interest is likely to continue, if the economy stabilizes.
“These kinds of bonds create some diversity on the bond market and calls for a lot of interest. The stability of the economy and other favorable factors will attract more investors into the local bond,” he noted, adding “It provides a safe alternative for people who want short term investments.”
The Finance Ministry say proceeds from the bond would form part of the sinking fund established by the government to repurchase specified debts, as part of the debt (liability) management strategy.
By Grace Asare|3FM|3news.com|Ghana