Time is running out for government to take a final decision on the launch of its fourth Eurobond. That is a caution from the New Patriotic Party Member of Parliament for Okaikoi Central, Patrick Yaw Boamah.
According to him, government was forced to abandon its latest bond issue after most investors showed poor interest, while the few that did offered a much higher yield than expected citing poor economic fundamentals for their move.
Top government officials led by the Finance Minister Seth Tekper on Friday ended talks with potential investors seeking to get them to patronize the country’s next Eurobond when issued.
But Mr. Boamah who was speaking on the AM Show on JoyNews on MultiTV said government needs to consider the time it has at its disposal especially since there are indications government intends to reduce the bond from $1.5 billion to $1 billion.
“If you want to reduce [the bond] what time frame do you have? We’re in a difficult situation and government has got to act quickly and swiftly because it is affecting business confidence” he said.
Mr. Boamah also criticized government for making the Eurobond a programme.
“NDC came into power and has made the Eurobond a programme which is a very dangerous thing to do because it sends a certain signal to the market about the weakness of your economy. We are back in the market for about $1.5 billion because of poor management, fiscal and monetary issues affecting this country to the extent that we’ve gone back for an IMF program” he said.
Patrick Boamah also argued that Ghana’s credit rating of BB- is “a junk rating. It’s not an investment grade for which any serious person in the market will respect. Because of that the market did not respond because of the lack of confidence in the economy of Ghana” he added.
The Okaikoi Central MP said if government goes ahead with the $1.5 billion bond with the proposed interest rate of between 11-12 percent, there will be dire repercussions for the country’s economy.
But the Managing Editor of the Al-Hajj newspaper, Alhaji Bature who was also on the show, refuted the MP’s argument that the country is back on the market due to poor management.
“It is not an issue of poor management of the economy … even if it is, it didn’t start with this government” he argued, adding, that economies like every endeavor in life, require foundations and “if your foundation is wrong your conclusion can never be right”.
He argued that managing an economy is “not just an event”.