Economist, Dr Lord Mensah, has stated the cost of Eurobond issued by the government is relatively expensive compared to previous years.

The country was successful in raising about $3 million dollars in debt instruments on the international capital market but the average cost of the bond is a little above 8%.

Dr Mensah said the success of the bond doesn’t mean the country’s investment climate is the best but rather government is desperate for money to finance the budget.

“This time if you look at the mixture, a year bond is going for 7.75 and the signals were clear. It is not about just raising the money but it has to do with the cost. The four-year zero-coupon bond is quite innovative. In a way, it will give us a breathing space…If you look at the amount we are paying at the end of the fourth year, relative to the beginning amount that we are raising, it gives you a return of 5% which overall when you put all the bonds together we are doing around 8% and 7% just like the 3 billion which has been broken on average,” he said.

“Effectively it is quite an innovative way to approach the market but then, in the end, the cost will still be high and because we are desperate for the money, in the end, we needed the money in Ghana,” he added.

Some experts have, on the other hand, indicated that the government’s $5 billion Eurobond has been oversubscribed.

The Finance Ministry is expected to put out a statement to give full details about the Eurobond oversubscription soon.

Ghana becomes the first African country to issue a zero-coupon rated bond. With a zero-rated coupon bond, no interest is paid whilst it trades a discount to its face value

Commenting on the oversubscription, spokesperson and Economic Adviser to the President, Dr Gideon Boako said the government will not accept all the bids submitted.