Former President John Dramani Mahama has made an interesting revelation about the issuance of Ghana’s critically needed $1 billion green and social bonds.
In May 2021, Bloomberg reported that Ghana was planning to raise as much as $1 billion through a sale of sustainable bonds, including Africa’s first social debt to fund a flagship policy to broaden access to education.
The sale, according to Bloomberg, was to be a mix of social and green bonds.
The country mandated Bank of America Corp., Citigroup Inc., Standard Chartered Plc, Standard Bank Group Ltd. and Rand Merchant Bank Ltd. as lead arrangers for the deal.
According to Former President Mahama, “government was forced to abandon the issuance of critically needed $1 billion in green and social bonds due to very high and unsustainable public debt levels.”
He explained that, this has happened as a result of a total loss of confidence by the international market in the Ghanaian economy.
“They do not trust us to be able to meet our repayment obligations because our finances are in shambles,” he stated.
“At the last reckoning, in the second quarter of this year, our total public debt stood at GH¢334 billion, representing a debt to GDP ratio of over 80%.”
According to Fitch, this is set to rise in 2022 and reach 90% in 2023. This also means that the public debt has increased by GH¢214 billon from GH¢120 billion in January 2017.
The debt to GDP ratio in January 2017 was 56%. Available data shows that Ghana’s Eurobond debt of $13.2 billion is the third highest in Sub-Saharan Africa.
Available data shows that Ghana’s Eurobond debt of $13.2 billion is the third highest in Sub-Saharan Africa. Expressed as a percentage of GDP, we have the highest in Sub-Saharan Africa at a staggering 17.8%.