Gov’t Borrowing Recklessly & Irresponsibly Without Any Thought About The Future – Sydney Casely-Hayford
Financial analyst, Sydney Casely-Hayford has argued that the $1 billion Eurobond announced by government might not be used for its purpose.
“We don’t know what they will use the money for because previous ones were misused. Government cannot pinpoint exactly what they use the money for as far as I am concerned,” he said.
Government announced a $1 billion Eurobond on Wednesday at a 10.75 percent coupon rate, becoming the first country in sub-Saharan Africa outside of South Africa to issue a 15-year bond.
According to Finance Minister Seth Terkper in a statement – the bond was 100 percent oversubscribed showing a “high appetite for Ghana’s credit” and a World Bank partial bond guarantee of $400 million enabled Ghana “to borrow on reasonable terms in a rather difficult market.”
Government had hoped to launch a $1.5 billion bond last week, but it was delayed due to little interest at the target yield of up to 9.5 percent.
Speaking on NEAT FM’s morning show Ghana Montie, Sydney Casely-Hayford charged government to tell – “Specifically where the money is going. We don’t want the money to be in Zoomlion’s account or AMA where it will not bring any economic benefits. Government must be honest with us and use the money for the purpose for which it is meant for.”
He further lamented that – “There’s nowhere in the world that a country will be granted a loan of 10.75 percent interest rate. So if that happened you grab the opportunity. Poland also went to Eurobond and their interest rate was 0.94 percent…less than one percent so if ours is 10.75 percent, there is nothing to be proud of in this issues.”
The Financial Analyst noted that “at the end of the day, they are not going to pay. 20 years from now, where will the finance minister be, where will the president be, they are not thinking about the people who will pay the money. They are borrowing money recklessly and irresponsibly with no thinking about the future,” he told host Kwasi Aboagye.